Weaker rand pushes JSE above 60 000


Weaker rand pushes JSE above 60 000


Published Date: 2018-01-09 | Source: Stephen Gunnion | Author: Stephen Gunnion

Weaker rand pushes JSE above 60 000

The rand came under pressure ahead of ANC President Cyril Ramaphosa's January 8 statement last night and analysts expect it to end 2018 weaker

The JSE closed above 60 000 for the first time this year as shares in miners and other resource stocks benefitted from a weaker rand and mostly firmer commodity prices. Anglo American rose 2.1% and BHP Billiton gained 2.8%. Other rand-hedge stocks benefitting from rand softness included Richemont, which added 2.1%. Retailers fared well on speculation that the Reserve Bank could cut interest rates this month following the rand's December rally as Deputy President Cyril Ramaphosa won the ANC's leadership election. The Foschini Group gained 2% while Mr Price rose 1.6% and Truworths added 1.1%.

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The rand weakened by more than a percent against the dollar and the pound, while it also lost some ground against the euro. The currency strengthened to R12.26 to the dollar on 28 December after trading above R14 for much of November on hopes of an economic turnaround under Ramaphosa. There has also been speculation that the ANC will negotiate an early departure for President Jacob Zuma, which could help stave off another ratings downgrade by Moody's, the only one of the three large ratings agencies that still has an investment-grade rating for South Africa. However, the Ramaphosa effect may be wearing thin, with some trepidation ahead of Ramaphosa's January 8 statement in East London last night. The slide could continue, with a Reuters poll of economists published on Friday predicting the rand will weaken by more than 12% this year.

The FTSE/JSE All Share Index ended 0.5% higher yesterday at 60 038. It closed at an all-time high of 61 211 on 21 November. At 5 pm, the rand was trading at R12.42 to the dollar, R14.87 against the euro and R16.83 to the pound.


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