Rand firmer but still off recent 7-month high
May 8, 2009
Johannesburg - South African stocks rebounded on Friday, latching onto higher world markets after a less than expected drop in US jobs boosted sentiment, while the rand edged firmer.
The JSE Top-40 index of blue-chip stocks rose 1.6 percent to 19 695.22 points and the broader All-share index gained 1.4 percent to 21 840.51 points, with the US government's banks stress tests also helping to lift optimism.
"Jobs numbers in the US, although still woeful, came in slightly better than expected," said Sasfin's fund manager David Shapiro.
"It's very difficult to pin-point how long this is gonna last. We're close to the 22 000 level... hopefully we'll keep plugging in but there's still a lot that we're going to have to contend with in the coming months," he said.
Petrochemicals group Sasol was among the top gainers on the blue-chip index as the price of crude oil rose. Shares in the company closed 5.33 percent higher at 294.99 rand.
The rand firmed slightly but, again, failed to take full advantage on a euro rally and big gains for government bonds, with investors eyeing President-elect Jacob Zuma's new cabinet.
Focus will be on who will fill the key finance minister post, with highly-respected Trevor Manuel likely to be moved after 13 years in the position.
Zuma will be inaugurated on Saturday and will announce his cabinet at 1200 GMT on Sunday, with Pravin Gordhan, the head of the tax authority and businessmen Tokyo Sexwale and Cyril Ramaphosa seen as favourites for finance minister.
The rand was trading at 8.36 to the dollar at 16.00GMT, 0.3 percent firmer than its previous close, buoyed late in the day by a strong Wall Street, after slipping to 8.4625 earlier in the session.
Traders said it may be due a bit of consolidation after running up hard to a 7 month high of 8.2502 at the start of the week, thanks partly to a boost in risk appetite and easing political uncertainty. "It's losing out ... it's still basically in ranges but it is steadily losing a bit of value.
It's done a stellar performance (recently) and so to consolidate a bit is not surprising," Bidvest Bank chief dealer Ion de Vleeschauwer said.
He said the market would likely react kindly to one of the frontrunners being named as finance minister, and may welcome Manuel's move to head up a new powerful planning commission, as speculated.
The euro surged to a one-month high above $1.35 after data showed the US lost fewer jobs than expected last month, boosting hopes of a recovery and drying up safe-haven flows into the greenback.
South African government bonds added to Thursday's gains, lifted by broader positive market sentiment and expectations of further interest rate cuts.
The yield, which moves inversely to the price, on the 2015 bond fell 9 basis points on the day to 8.075 percent, while the 2036 yield was the same margin lower at 8.145 percent. On the bourse, heavyweight Anglo American jumped 4.08 percent to 203.60 rand and rival BHP Billiton added 1.67 percent to 193.49 rand, tracking firmer metal prices.
Gold miner Harmony inched up 0.36 percent to 83.60 rand after lower third-quarter output and headline EPS.
Elsewhere, grocer retailer Spar Group rose 6.39 percent to 54.79 rand, outpacing its closest peers Pick n Pay, which added 2.55 percent to 32.20 rand.
Net 1 UEPS Technologies, which also trades on Nasdaq, plummeted 16.08 percent to 120 rand after the technology firm posted an 11 percent decline in Q3 net income. - Reuters
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