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Africa, Forex

South Africa’s rand finds support in weaker dollar, stocks firm

(Recasts throughout, updates levels, adds stocks)

JOHANNESBURG, Nov 30 (Reuters) – The South African rand strengthened on Tuesday, benefiting from a weaker dollar after Moderna’s chief executive said COVID-19 vaccines are unlikely to be as effective against the Omicron variant as they have been with other types.

Risk appetite took a beating across world markets but a weaker dollar saw the rand trading at 16.0300 at 1603 GMT against the greenback, 0.68% firmer than its previous close.

The currency plunged to its weakest since October 2020 on Friday as the world reacted with alarm to the news of the new variant, Omicron, which was first detected in southern Africa.

Market participants however remained cautious.

“Markets seemed to be moderating after last week’s initial panic but remain skittish to any negative news, with Moderna suggesting a new vaccination may be needed and Jerome Powell cautioning that risks to the US economy from the new variant are to the downside,” RMB economist Siobhan Redford said.

In fixed income, the yield on the benchmark 2030 maturity dipped 9 basis points to 9.770%.

The Johannesburg All-Share index closed 0.67% firmer, while the Top-40 index climbed 0.73% due to “bargain hunters mainly. The weaker rand makes them (stocks) very attractive from a valuation perspective,” Sasfin Securities portfolio manager Nesan Nair said.

Gold stocks also helped the bourse higher, tracking bullion as investors look for a safe haven metal as fears over the spread of the Omicron variant grow.

Miners Anglogold Ashanti, Gold Fields and Harmony Gold, rose between 8.87% and 6.98%.

Aspen Pharmacare closed 6.26% firmer after it took a step towards a licensing deal to package and sell Johnson & Johnson’s COVID-19 vaccine in Africa, announcing on Tuesday it had signed non-binding terms with subsidiaries of the U.S. drugmaker. (Reporting by Nqobile Dludla and Olivia Kumwenda-Mtambo; Editing by Kim Coghill and Ken Ferris)

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