Views Article – Sharenet Wealth

Africa, Forex

South Africa rand up as risk appetite revives, stocks rise

(Updates rand, bond prices; adds stocks)

JOHANNESBURG, July 6 (Reuters) – South Africa’s rand firmed on Monday, thanks to a broad recovery in risk appetite on growing expectations of a strong Chinese economic rebound.

The Johannesburg Stock Exchange closed higher than in the last nine trading sessions due to the China-led optimism.

At 1500 GMT, the rand was 0.7% firmer at 16.9300 per dollar.

A raft of strong factory activity and trade readings from China over the past week has underpinned the country’s risk assets, with broader emerging markets rising in tow.

“From (a South Africa) perspective, our manufacturing data will also be released on Thursday … it will give us a view of how badly the COVID-19 pandemic has hit this sector of the economy,” analysts at TreasuryOne said in a note.

“With little in the way of data, we can expect that the pandemic will attract most of the attention, and will drive sentiment and market moves this week. With the current ‘risk-on’ sentiment we expect the rand to trade in a narrow band around R16.90/R17.10.”

The benchmark FTSE/JSE All Share Index closed up 0.73% to 54,919 points and the FTSE/JSE Top 40 Companies’ Index went up 0.81% to end at 50,585 points.

Bonds weakened, with the yield on the 2030 government issue rising 9 basis points to 9.515%. (Reporting by Olivia Kumwenda-Mtambo and Promit Mukherjee; Editing by Alison Williams)

A street money changer counts South African Rands in Harare

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