STANBANK: 18,701 -99 (-0.53%)
S.Africa's rand flat, stocks retreat as investors await political developments
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JOHANNESBURG, Jan 11 (Reuters) - South Africa's rand was
flat on Thursday, taking a breather after a week of volatile
trade driven by swirling speculation that President Jacob Zuma
would step down before his term ends in 2019.
Stocks were led lower by banking stocks which came off a
previous rally on the back of rumours of Zuma's early exit.
At 1515 GMT the rand was 0.03 percent firmer at
12.4300 per dollar, having opened at 12.4325 and weakened to the
12.50 psychological mark before clawing back some ground as
economic data from the United States disappointed.
In the previous session the rand briefly slipped to a 2-week
low of 12.5500 after the ruling African National Congress said
an early exit for Zuma had not been discussed at a party
The rand has breached 12.50 three times since the beginning
of the year but has failed to close above that level. It has
also stopped shy of the 21-day moving average at 12.60, opening
the door to gains towards the 12.25 level as investors buy the
currency based on trend analysis.
A higher gold price, South Africa's chief commodity export,
also supported the rand. Gold prices rose on Thursday to near
their highest in four months after a hawkish tone in the minutes
of a European Central Bank meeting pushed the euro sharply
higher against the dollar.
The dollar also weakened after data showed a rise in U.S.
jobless claims and a decrease in U.S. producer prices.
Locally, manufacturing figures showed the sector expanded
1.7 percent in November, a touch higher than forecast, easing
pressure on the currency as the economy showed further signs of
Bonds weakened, with the yield on the government issue due
in 2026 adding 1.5 basis points to 8.61 percent.
On the bourse, the benchmark Top-40 index fell 0.65
percent to 52,825 points while the All-Share index
lowered 0.62 percent to 59,606 points.
The banking sector weakened 2.07 percent, with
FirstRand falling 3.11 percent to 61.04 rand, Nedbank
dropping 1.96 percent to 249.22 rand and Standard
Bank weakening 1.84 percent to 187.44 rand.
"A lot of them are in over-bought territory ... these stocks
run up on the premise that Jacob Zuma would be gone or that
discussion about him exiting office would be made at the NEC
meeting ... The market rallied on that assumption," said
Independent Securities trader Ryan Woods.
(Reporting by Mfuneko Toyana and Tanisha Heiberg; editing by
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