Registered users can save articles to their personal articles list. Login here or sign up here

Rand firms as trade surplus jumps, stocks up

Rand hits 7-week high vs dollar, shares up led by commodities.

The rand raced to a seven-week high against the dollar on Tuesday bolstered by data showing a better than expected trade surplus in June, while stocks ended higher.

At 15:53 GMT, the rand traded at 13.09 per dollar, 0.49% firmer than its close on Monday and its strongest level since June 11, according to Thomson Reuters data.

South Africa’s trade surplus widened more than expected to R12 billion in June as exports in precious, base metal and vehicle parts jumped, easing pressure on the economy.

Analysts said the large surplus was a sign the current account was narrowing, which would lessen the impact of any reversal of portfolio flows.

“Although economic growth has been sluggish with the unemployment rate rising to 27.2%, the rand showed its resilience as it continues its journey down to the 13.00 mark,” said Bianca Botes, a corporate treasury manager at Peregrine Treasury Solutions.

“As global trade tensions ease and investors once again seek yield in emerging markets, the rand is enjoying some respite for the time being.”

The rand has rallied in the past month to become one of the top performing emerging market currencies, due mainly to positive turn in sentiment, but remains at risk to offshore events, particularly the ongoing trade tiff between the United States and China.

In fixed income, the yield for the benchmark paper due in 2026 was flat at 8.59%.

On the bourse, shares rose in line with European markets.

The blue-chip Top-40 index closed up 0.17% at 51,315 points, while the broader All-Share index ended 0.21% higher to 57,432 points.

“Commodity shares led the upward momentum. There is stability in the markets,” said FFO Securities portfolio manager Wilmar Buys.

Among the top gainers, Johannesburg-listed shares in Glencore gained 3.22% to R57.76, Anglo American Platinum advanced 3.05% to 404.50 rand and diversified miner Sibanye-Stillwater rose 1.65% to R8. 

Get access to Moneyweb's financial intelligence and support quality journalism for only
R63/month or R630/year.
Sign up here, cancel at any time.


To comment, you must be registered and logged in.


Don't have an account?
Sign up for FREE





Follow us:

Search Articles:Advanced Search
Click a Company: