Rand scales 8-week highs, stocks rise

Metal prices push up stocks.

JOHANNESBURG – South Africa’s rand firmed to an eight-week high against the dollar on Monday as investors returned to high yielding assets boosted by improved oil and commodity prices.

Stronger commodity prices buoyed the stock market.

At 15.20 GMT, the rand traded at 15.2175 versus the dollar, compared to its Friday’s close of 15.3850.

The currency hit its strongest levels this year at 15.1930 earlier in the session, tracking emerging markets higher on hopes of further stimulus and recovery in commodity prices.

Following President Jacob Zuma’s announcement of cost-cutting measures during his state of the nation address, the market has priced in a convincing budget speech on February 24, by Finance Minister Pravin Gordhan. 

“Expectations are now high for the Budget, as the rand has strengthened in anticipation,” said Investec chief economist Annabel Bishop.

In fixed income, government bonds weakened, with the yield for the benchmark instrument due in 2026 adding 2 basis point to 9.195%.

The Top40 index rose 0.51% to 43,694 points while the broader All-Share index inched up by 0.35% to 49,112 points.

Kumba Iron Ore jumped 7.33% to R65 as the price of the steel-making ingredient added 7%, extending last week’s rally on signs of a pick-up in demand in the over supplied market.

Cashbuild shares jumped 6.88% to R295 as it said it expected earnings to rise as much as 39%. 

Hulamin said full-year earnings fell 67% while sales volumes slipped 7%, sending its shares down 6.25% to R6.

Trade volumes was brisk on Monday with about 237 million shares changing hand, according to preliminary bourse data. 

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