Rand, bonds weaken as ANC pushes ahead on land expropriation

The rand fell and government bonds weakened early on Wednesday after President Cyril Ramaphosa said the ruling party will press ahead with plans to amend the Constitution to allow for the expropriation of land without compensation.

At 0612 GMT, the rand traded at 13.35 per dollar, 0.58% weaker than its close on Tuesday.

In fixed income, the yield for the benchmark paper jumped 13 basis points to 8.72%.

“Headlines regarding constitutional amendment’s for the expropriation of land without compensation are never greeted with much enthusiasm in this region of the world,” Nedbank analysts wrote in a note.

Ramaphosa said late on Tuesday the African National Congress will finalise a proposed amendment to the constitution to outline more clearly the conditions under which expropriation of land without compensation can be effected.

Some investors are concerned that the move will result in white farmers being stripped of land to the detriment of the economy, although Ramaphosa has repeatedly said any changes will not compromise food security or economic growth.