The rand continued to rally on Friday, lifted using a deep Wall Street selloff and near unanimous bets that Moody’s keeps the country’s credit standing at investment grade.
Stocks snapped a four-day losing streak to get rid of a few days positive, led by market heavyweight Naspers.
At 1530 GMT the rand was 1.25% firmer at 14.45 per dollar, posting a whole new one-week best as emerging markets overall taken advantage of a revival in risk appetite right after the two-day slide on Wall Street.
Markets are also widely expecting Moody’s to keep Pretoria’s currency exchange rating unchanged and are generally awaiting the mid-term budget (MTBPS) to be delivered by new finance minister Tito Mboweni on October 24.
“Though it feels odd that Moody’s would announce the review this sort of short period of time prior to MTBPS, additionally, it can reflect the appreciation that it’s a communication tool that won’t hold any substantive changes,” analysts at Investec said.
In March Moody’s affirmed South Africa’s investment-grade credit ratings and revised its outlook to stable from negative. Recently the company said there’s little chance it may well cut the country to ‘junk’ this year.
Bonds were also firmer, while using yield on the benchmark government bond due in 2026 down 2 basis points to 9.245%.
In the equities market, the All-Share index was 2.38% firmer at 53,473 points although blue chip Top 40 Index climbed 2.65% to 47 273 points.
Global markets recovered on Friday following aggressive sell-off led by Wall Street.
Naspers led the Top 40 Index, rising 8.46% to R2 908. Hong Kong’s Tencent Holdings, whereby Naspers provides a 31.2% shareholding, closed 8% higher. Banks rose 3.32%.
On the technical front, Thursday’s sell-off drove your neighborhood market deep into oversold territory.
“The majority of the bounce is on Naspers. Some key technical levels have been broken and we’re unclear the plays out,” said Vasili Girasis, equities trader at BP Bernstein. “My feeling could be that the volatility has arrived to stay a minimum of your next weeks.”
South Africa’s biggest food producer Tiger Brands said on Friday it had re-opened a facility that has been closed after it turned out implicated while in the world’s largest outbreak of listeria which killed more that 200 people.
Shares while in the food producer closed 3.96% higher.?