JOHANNESBURG – The rand rallied on Thursday as investors cheered a constitutional court ruling that parliament could hold a secret ballot in a no-confidence vote against President Jacob Zuma, who has said such a vote would be unfair. Meanwhile, shares dipped.
By 1600 GMT the rand gained 0.7 percent to 12.9950 per dollar, dipping below 13.00 for the first time since Monday.
Despite data signalling the economy could bounce back from recession, investor sentiment has been clouded by political turbulence.
The rand slipped to a three-week low on Monday as a government anti-graft body recommended a change to the central bank’s mandate on targeting currency and inflation stability.
A push back from the bank and Thursday’s court ruling on a no-confidence vote eased investor concerns, lifting demand for the currency.
Wichard Cilliers, chief dealer at Treasury One, said anticipation of the court ruling lured buyers to the rand and helped shake off sluggish demand for emerging market assets.
On the bourse, the benchmark Top-40 index fell 0.6 percent to 44,944 points, while the All-Share index was down 0.6 percent to 51,072 points.
“The market has been fairly negative, we’ve had our futures edging down all day and basically people have been selling off the rest of the market,” said Cratos Capital stock broker Yusuf Mola.
Caxton and CTP Publishers and Printers dropped 6.8 percent to 11.16 rand after the Competition Tribunal rejected Caxton’s application for leave to intervene in hearings about the merger between Media24 and Novus Holdings .
Bourse heavyweight Naspers fell 0.9 percent to 2571.80 rand after it said its subsidiary Myriad International Holdings B.V.(MIH B.V.) was exploring the possibility of an international U.S. dollar bond offering.