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#RandReport: Rand stabilises after torrid week; shares rise

At 1525 GMT the rand was steady at 0.02% at R12.4325 per dollar, having fallen as far as R12.5325 on Wednesday, its weakest since 10 January.

Picture: Pixabay.com.

JOHANNESBURG - South Africa’s rand stabilised on Thursday after a torrid week which saw the currency set several new three-month lows against the dollar, while stocks rose thanks to gains for firms including banks and some retailers.

South African markets will be closed on Friday for the Freedom Day public holiday.

At 1525 GMT the rand was steady at 0.02% at R12.4325 per dollar, having fallen as far as R12.5325 on Wednesday, its weakest since 10 January.

The South African currency is down around 2.6% since the end of last week as emerging market currencies worldwide have suffered steep falls because of a soaring dollar.

“We expect the rand to regain lost ground as soon as global conditions stabilise. The recent change of leadership points to structural improvements in the South African economy and should underpin confidence,” currency analysts at UBS said in a note.

South Africa’s new president Cyril Ramaphosa has staked his reputation on revitalising the economy and rooting out corruption, which marred his predecessor Jacob Zuma’s nine years in power. Since Ramaphosa’s election in February, business and consumer confidence have risen.

Government bonds were little changed, with the yield on the benchmark government bond due in 2026 up 1.5 basis points to 8.220%.

On the bourse, the benchmark Top-40 index rose 0.89% to 50,684 points, while the All-Share index gained 0.82% to 57,453 points.

“We’re seeing a bit of a breather after a sharp selloff in the last three days,” said FFO Securities portfolio manager Wilmar Buys. “We are recovering on low volumes.”

Most sectors closed higher, with banks, utilities, retailers and telecoms seeing gains. Rand hedge stocks, which investors use to position for a weaker rand, came under pressure.

Clothes retailer Mr Price closed up 3.79% to R272.00 after saying it expected full-year earnings per share to rise by up to 22%.

Crisis-hit retailer Steinhoff was an outlier, closing down 11.3% to R1.96 after falling as much as 17%, when former board member and shareholder Christo Wiese said he was launching a $5 billion lawsuit against the company.

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