Rand and shares bounce from sharp losses

The rand firmed early on Thursday, pulling back from a slide to its lowest in nearly 11 months as investors digested signs of global economic recession and looked to buy the currency at cheaper rates in anticipation of sharper falls.

The rand was up almost 1% at 15.22 against the US dollar after a low of 15.44 on Wednesday as risk-aversion was stoked by an inverted US Treasury bond yield curve – widely viewed as a sign of looming global recession – for the first time since 2007.

Traders said the recovery was likely to be short-lived, given the domestic economic and political outlook after a contraction in GDP and continuing legal challenges against President Cyril Ramaphosa.

Equities also opened firmer, with the Johannesburg Stock Exchange’s Top-40 index rising nearly 0.5%, after plunging to a six-month trough in the previous session.

Bullion producer Gold Fields swung to a first-half profit as output increased after the inclusion of its joint venture with Asanko Gold, but headline earnings per share fell, sending its share price down by 3%.

Read: Gold Fields returns to profit as it extends life of Ghana mine

Bonds strengthened slightly, with the yield on the benchmark paper due in 2026 down 0.5 basis points to 8.465%.