Rand strengthens on global risk demand, stocks up

Login

Register

http://www.clubofmozambique.com/

Rand strengthens on global risk demand, stocks up

8:29 CAT | 08 Dec 2020

Image: Shutterstock

South Africa’s rand strengthened on Monday, resuming a recent rally that has pushed it to pre-pandemic levels, with investors lured back into risk assets by progress in Covid-19 vaccines and hopes of further stimulus in the United States.

At 16:00 GMT the rand was 0.67% firmer at R15.12 per dollar, its strongest since November 26, from an opening level of R15.21.

The rand has gained around 6% against the US currency since the start of November, supported by an uptick in global risk appetite that has largely outweighed investors’ worries about South Africa’s dire economic situation.

Third quarter growth data due on Tuesday could give them another reminder of South Africa’s condition, and some analysts asked how much room there was left for further strengthening.

“Indications at this time are that the majority of market participants are already largely on the sidelines going into year-end,” said Nedbank analysts in a note.

“While the rand remains relatively buoyant, it is likely to require a significant market catalyst to trigger a move sub the R15.00 level.”

Bonds firmed, with the yield on the benchmark 10-year government bond down 4 basis point to 8.945%.

Anglo American Platinum (Amplats) led platinum mining stocks higher, offsetting losses in retail stocks.

Amplats closed 4.67% firmer, after it raised its 2020 refined output guidance after rebuilding the Phase A unit of its Anglo Converter Plant (ACP) processing site ahead of schedule.

Impala Platinum also rose, up 10.7% after the firm said it would buy back up to R1.6 billion of convertible bonds. Northam Platinum climbed 5.7%.

Also boosting the Johannesburg All-share index, which closed 0.18% firmer at 59 527 points, were gold stocks.

The local gold index rose 0.76%, tracking higher global prices.

Source: Moneyweb