RAND SLIPS, JSE HITS NEW HIGH

THE RAND weakened yesterday in a broad, developing world currencies retreat against a strong dollar, while stocks hit a fresh record high as rising commodity prices lifted assets in the resource-rich region.

By 6.15pm, the rand fell 0.22 percent to R15.03 against the dollar, losing ground after a recovery rally that took it to a session-best R14.90 on Monday.

Government bonds also fell and the yield on the instrument due in 2030 jumped 11 basis points to 9.05 percent.

Soaring US bond yields, drawing yield-searching investors back into the greenback, led to a rout of risk assets last week and dragged the rand to onemonth lows.

“Our base case for strong global growth and rising commodity prices should be supportive of EM FX generally, and with broader commodities outperforming, the ZAR continues to be front of mind in benchmarking EM currencies against global reflation scenarios,” said analysts at London-based MUFG Securities.

“While the case for ZAR longs is global in tone, the domestic backdrop for currency strength is more mixed.”

Stocks closed firmer, with the JSE all share index up 1.44 percent to a fresh record high of 68 510.75 points, while the Top40 index climbed 1.61 percent to a record 63 104.7 points.

Leading the gainers was diversified manufacturer KAP Industrial, which jumped 7.9 percent to R4.37 after the country’s seasonally-adjusted Absa Purchasing Managers’ Index (PMI) expanded at a faster pace in February compared with January on Monday.

“After a slow and concerning start to the year, it would seem that the manufacturing sector has turned a corner if the latest PMI figures are anything to go by,” Jee-A van der Linde, an economist with NKC African Economics, said in a note.

Heavyweight mining stocks also firmed. I