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#RandReport: Rand soars to 17-month high, stocks flat

At 1550 GMT the rand was 0.52% firmer at 13.0275 per dollar, stepping back slightly from a session peak of 12.9850.

Picture: Supplied

JOHANNESBURG – The local currency extended its rally on Wednesday, climbing by more than half a percent to trade below the psychologically crucial R13,00 per dollar mark for the first time since late 2015 after better than expected inflation data.

Stocks were little changed with Comair among the gainers after the operator of British Airways announced that a South African court awarded it more than R1 billion in an antitrust dispute.

At 1550 GMT the rand was 0.52% firmer at R13.0275 per dollar, stepping back slightly from a session peak of R12.9850 as demand for emerging currencies was tamed by bets of faster rate hikes in the United States following a solid inflation print there.

Locally, headline consumer prices slowed to 6.6% year-on-year in January from 6.8% in December, against expectations of 6.7%, suggesting the Reserve Bank could begin cutting lending rates soon than expected.

Chief economist at Old Mutual Investment Rian le Roux said a lack of dramatic policy changes from Tuesday's address before parliament by President Jacob Zuma and a consistent rise in commodity prices had also boosted the currency.

"In fact, looking back over 2016 shows that the price of a basket of SA's four largest commodity prices rose by about 30% in US dollar terms from late in 2015 to the end of January 2017," le Roux said.

Government bonds also firmed, with the yield on the benchmark 2026 paper dropping 4 basis points to 8.575%.

On the bourse, the Johannesburg All-Share index drifted sideways for most of the local session as investors sought fresh catalysts.

The benchmark Top-40 index inched down 0.06% to 45,410 points while the All-Share index inched up 0.04% to 52,485 points.

Comair shares rose more than 17% to a 23-month high after announcing a South African court awarded it more than R1 billion in an antitrust dispute with South African Airways. Shares closed 15.84% higher to R5.85.

EOH Holdings, among the top two gainers, closed 8.99% up to 155.85 after the firm flagged higher earnings for the six-months ended January.

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