#RandReport: Rand edges lower on cabinet reshuffle fears
By 1500 GMT the rand had pared back earlier losses to trade 0.1% weaker at R13.0650 per dollar.
JOHANNESBURG – Stocks snapped a four-session losing streak on Monday, buoyed by retailers Steinhoff and Shoprite which announced they had scrapped their plan to merge after failing to agree on a price.
Shoprite rose 8.6% to hit a 2-month high of R188 ($14.41) and Steinhoff advanced 5% to R70.11. Investors had been unnerved by the lack of detail surrounding the proposed exchange ratio.
"For Shoprite there has been a major overhang around this acquisition for a very long time and I think it will free up any uncertainties," said Paul Chakaduka at Global Trader.
The benchmark Top-40 index was up 1% at 45,506 points, while the All-share climbed 0.6% to 52,558.
Banks weighed on the bourse with the banking index shedding 0.6% as investors continued to digest the competition watchdog's recommendation that banks should be fined for rigging the rand currency.
On the currency market, the rand edged lower, weighed down by renewed fears of a Cabinet reshuffle ahead of Finance Minister Pravin Gordhan's budget speech on Wednesday.
By 1500 GMT the rand had pared back earlier losses to trade 0.1% weaker at R13.0650 per dollar, as stronger commodity prices and investors seeking higher rewards lifted demand for emerging currencies.
However, there was caution in the market ahead of speeches by US Federal Reserve policymakers due later this week, with investors awaiting further clues on the timing of US interest rate hikes.
Gordhan is expected to announce plans to lower the fiscal deficit, including new taxes to plug a revenue shortfall caused by low economic growth.
"Fiscal consolidation tends to put downward pressure on inflation, making it more likely that the Reserve Bank will consider interest rate cuts, a further positive for domestic bonds," said investment strategists at Old Mutual Dave Mohr and Izak Odendaal in a note.
Bonds were weaker, with yields on the benchmark paper due in 2026 adding 10.5 basis points to 8.785%.