#RandReport: Rand rallies, Naspers lifts stocks

At 15:00 GMT the rand was 0.73% firmer at 13.2175 per dollar, its strongest since 8 August.

Picture: EWN.

JOHANNESBURG - South Africa's rand raced to a one-week high on Wednesday as traders bet the currency was poised for a sustained uptrend as political fears eased and the economy shows signs of clawing its way to recovery.

South African shares also rose, led by heavyweight Naspers after its subsidiary Tencent Holdings Ltd trumped forecasts to deliver its best-ever quarterly results.

At 15:00 GMT the rand was 0.73% firmer at 13.2175 per dollar, its strongest since 8 August, shrugging off a warning by Moody's that political turmoil inside the ruling African National Congress risked derailing policy reforms.

"If you look through the political noise, economic fundamentals are pointing to ZAR resilience. We're bullish, not aggressively so but we're seeing the dust settle and the rand testing the downside," said Halen Bothma of ETM analytics.

Data on Tuesday showed South African retail sales rose 2.9% year-on-year in June. Together with trade surpluses for the last five months and a narrowing current account deficit, the short-term outlook for the rand was positive, economists said.

"Very encouragingly, in the past three months from April to June retail sales rose by a substantial 2.1%, which should help to boost the Q2 2017 GDP growth estimate, helping to pull South Africa out of recession," said Stanlib economist Kevin Lings.

Traders said minutes of the US Federal Reserve's recent meeting, due out after the close of local trade, was unlikely to impact the rand as expectations for at least one more US rate hike this year were priced in already.

The JSE All-share index climbed 1 percent to 55,534 points, while the Top 40 index rose 1.14% to 49,211 points.
Shares in Naspers rose 2.93% to R2,887.15 after Tencent beat forecasts to report its best-ever quarterly results, driven by higher income from smartphone games, payments and online advertising.

Naspers, a R1.2 trillion multinational with private equity-style investments, owes much of its valuation to its $33 million investment in Tencent, which is now China's biggest internet company with a $387 billion market capitalisation. Naspers currently owns around a third of Tencent.

"It's a huge part of Naspers' stable so it's going to materially affect the share price when it does well or badly," said Independent Securities trader Ryan Woods.

Bonds traded firmer, with the yield on the benchmark 2026 paper slipping 4 basis points to 8.545%.