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#RandReport: Rand recovers, Sibanye hits record high as stocks climb

The rand edged up 0.16 percent to 15.5705 per dollar, well off its rally to a two-month high below 15.20/dlr.

The South African rand. Picture: Craig Wynn/EWN.
Finance Minister Pravin Gordhan,Pravin Gordhan,the rand
Business Local

JOHANNESBURG – The rand recovered on Thursday after plunging on Wednesday when a budget speech by the finance minister failed to convince investors the economy's prospects were improving.

Stocks rose in line with a European rebound as risk appetite returned. Investors were also cheered by domestic corporate news such as Sibanye Gold's announcement that it would raise its dividend payout.

At 1514 GMT, the rand had edged up 0.16 percent to 15.5705 per dollar, well off its recent rally to a two-month high below 15.20/dlr.

Bonds were mixed, with the yield on the benchmark paper due in 2026 unchanged at 9.27 percent.

“The currency managed to make some ground back, while buyers of bonds could be found at yesterday's close. As such, we expect both the rand and bonds to continue to consolidate at slightly stronger levels,” Rand Merchant Bank's fixed income trader Gordon Kerr.

Calm slowly returned in the market after Finance Minister Pravin Gordhan's announcement of spending cuts, public-sector job freezes and moderate tax increases on property sales, fuel and alcohol on Wednesday.

Fitch on Thursday said Gordhan's first budget since his reappointment was a step towards restoring confidence in public finances, but unspecified tax measures in later years and weak economic performance pose implementation risks.

In equities, the benchmark Top-40 index rose 0.68 percent to 42,743 while the wider All-share index gained 0.79 percent to 48,373.

Bullion producer Sibanye's share rose 5 percent to 54.60 rand after earlier reaching a record high above 56 rand, despite reporting a 59 percent drop in full-year earnings. Investors welcomed an increase in dividend payouts, already one of the highest in the sector at 25 to 35 percent of normalised earnings.

South Africa's biggest health insurer, Discovery Ltd, fell 3.6 percent to 115.25 rand after the company posted no growth in first-half profit, weighed down partly by the cost of setting up a bank.

More than 255 million shares changed hands, below last year's daily average of 296 million shares, according to preliminary bourse data.


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