Market Update
South Africa’s rand hit a two-week high against the dollar (14.0020) on Thursday after the central bank governor raised the repo rate, while shares rose led by Gold Fields which reported a much-improved quarter.
The central bank lifted interest rates by 25 basis points to 6.25 percent, to curb future inflation risks.
“One thing possibly working on the rand’ s favour on a relative basis is that the SARB has been one of the more proactive central banks in EM in that it has started its hiking cycle before the Fed,” HSBC Bank senior currency strategist Dominic Bunning said. “This may provide some breathing room for the currency relative to others whose central banks might be seen as more “behind the curve”, he said.
Government bonds weakened across the curve with the yield on the benchmark government bond maturing in 2026 adding 1 basis points at 8.465 percent after shedding more than 9 basis points after the rate decision.
On the stock market, the benchmark Top-40 index rose 0.83 percent to 46,851 points while the All-share index climbed 0.89 percent to 52,116 points.
Shares in Gold Fields, which also reported flat normalized earnings for the third quarter, closed 17 percent higher at 36.26 rand, after rising as much as 29 percent, when it said it expected further improvements in its South Deep mine while reviewing the future of its costly Damang operations.
“Gold production at South Deep is up quite nicely in quarter and guidance for the year is decent,” said Noah Capital Markets analyst Rene Hochreiter.
Trade was brisk with 233 million shares changing hands, compared to last year’s daily average of 187 million shares.
Source: Reuters
