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Rand, bonds slide after ANC says no deadline for Zuma exit

Cloud of uncertainty hanging over Zuma’s future .

The rand weakened on Tuesday after the ruling African National Congress (ANC) said it had not given President Jacob Zuma a deadline to accept its decision to “recall” him and resign.

At 1534 GMT the rand was 0.46% weaker at 11.97 per dollar.

Bonds also weakened with the yield on the benchmark 2026 government issue up 1 basis point to 8.46%.

“Nothing much more was elaborated at the ANC press conference so there is still a lot of uncertainty,” said currency trader at TreasuryOne Phillip Pearce.

“At the moment there is some dollar weakness so the rand should be benefiting, but we are pretty much stuck in limbo between 11.80 and 12.20,” Pearce said.

ANC Secretary-General Ace Magashule said on Tuesday the party would deal with the issue should Zuma refuse to step down as head of state as ordered by his party, but said the party had not given him a deadline to do so.

Magashule said Zuma had promised to respond to the order by Wednesday.

The decision to order Zuma’s removal from office followed 13 hours of tense deliberations and one short face-to-face exchange between Zuma and Cyril Ramaphosa, the businessman who was elected party chief in December.

The rand’s fortunes have been closely tied to political outcomes over the past couple of months, with the currency rallying on any sign of an end to the corruption scandals and economic decline that have tainted Zuma’s time in office.

On the equities market, stocks followed their emerging market peers higher as rekindled risk appetite returned into the market following a sell-off last week that saw local major indexes hit levels last attained in October 2017.

“Investors seem to have entered the new trading week with a renewed appetite for risk,” said research analyst at FXTM Lukman Otunuga.

The Johannesburg All Share Index rose 1.78% to 57 208 points, while the Top 40 Index climbed 1.74% to 50 405 points.

A string of positive results and trading statements also helped the bourse higher, with Kumba Iron Ore up 1.33% at R346.28 after it posted a 12% increase in headline earnings per share and resumed annual dividend payment.

Harmony Gold closed 3.73% higher to R21.12 after saying half-year profit rose 49%, boosted by improved performance at its local operations. 

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