RAND BOUNCES BACK, JSE HIGHER

THE RAND firmed yesterday, as a pullback in the dollar offered support despite continued power cuts that cloud the domestic economic growth outlook.

At 5pm, the rand traded at R15.95 against the dollar, 1.28 percent firmer than its previous close.

The dollar fought for a footing after falling from near 20-year highs on Monday, as investors trimmed bets on whether US interest rate hikes will drive further dollar gains and investor appetite for riskier assets increased.

On Monday, the stronger dollar and a power crisis at home saw the rand hit its weakest level since November, 2021.

“Severe US interest rate hikes… will have a marked negative effect on growth both in the US and globally, and so on the rand, which is already at very undervalued levels,” Investec economist Annabel Bishop said.

She added that the rand was at risk of weakening further in the rest of this quarter and the third quarter of 2022, due to a traditionally greater aversion to risk among investors in the northern hemisphere summer.

Eskom implemented deeper controlled outages due to more breakdowns at its generating units, meaning a larger part of the country experienced rolling blackouts.

On the JSE, the all share index closed 0.7 percent up at 69 696.39 points and the blue-chip Top40 index rose 0.85 percent at 63 026.74 points.

Although local economy linked stocks such as banks and financials slipped on the back of weak investor confidence, mining stocks jumped led by increase in platinum and coal prices, giving the market a boost.

Tech investor and biggest listed company on the JSE, was up 6.7 percent and its subsidiary was up 5.8 percent.

Government bonds firmed with the yield on the benchmark 2030 maturity dropping 3 basis points to 9.985 percent.