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Resources boost SA stocks, rand dips amid cautious trading

Rand falls ahead of Ramaphosa speech.

South African shares firmed on Friday, supported by resources stocks lifted by better than expected Chinese trade data, while the rand slipped in cautious trading ahead of a weekend speech by the leader of the ruling African National Congress party.

The rand was down 0.18% at 12.41 to the dollar by 1552 GMT, on course for a weekly decline of about 1%.

The benchmark Top 40 Index, meanwhile, rose 0.9% to 53 296 points, while the All Share Index was up 0.8% at 60 083.

Resource shares benefited from the Chinese trade data, with BHP Billiton rising 2.9% to 279.59 rand and Anglo American up 1.5% at R298.08.

Despite a slowdown in China’s December trade data the overall picture for 2017 was one of strong global appetite for Chinese products, with exports beating analyst forecasts, up 10.9% from a year earlier.

The slight dip in the rand reflected investor caution ahead of an important speech on Saturday by ANC leader Cyril Ramaphosa.

Gerrit van Rooyen, of NKC African Economics, said investors would scrutinise Ramaphosa’s speech for clues on his policy preferences, as well as signals that President Jacob Zuma could be forced to step down soon.

Speculation about when Zuma will leave office has driven rand volatility in recent weeks. Zuma’s second presidential term ends in 2019, but Ramaphosa could push for an earlier resignation.

Ramaphosa will be speaking in East London on Saturday to mark 106 years since the ANC was founded.

In fixed income, bonds strengthened, with the yield on South Africa’s benchmark government bond due in 2026 down 2.5 basis points at 8.570%.

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