Rand firmer, stocks creep up

The rand firmed on Friday, ending the week close to where it began, as some disappointment over the president’s economic recovery plan was offset by weakness in developed market currencies amid a surge in coronavirus infections.

At 1500 GMT the rand was 0.75% firmer at R16.52 per dollar, not far from Monday’s opening level of R16.50, reflecting the subdued trade that has prevailed for most of week.

Sentiment toward the rand has largely been driven by external events, with upcoming presidential elections in the United States, and wrangling over an economic stimulus package between Democrats and Republicans there the main focus.

Fresh restrictions to combat Covid-19, introduced across Europe, and a flush of new cases in the US Midwest have also spooked investors, limiting bets on risk assets but only slowing enthusiasm for safe havens.

President Cyril Ramaphosa’s unveiling of a keenly awaited economic recovery plan on Thursday produced few fireworks, and the rand’s response was consequently muted.

Analysts said the plan contained “nothing new” and was short on details, shifting the focus to the medium term budget now due on October 28 after the finance minister asked for a week’s delay.

“This is not a ‘whatever it takes’ economic plan, as promised by the President, nor are these really extraordinary measures,” said Old Mutual Chief Economist Johann Els.

Government bonds firmed, with the yield on the instrument due in 2030 was down 7 basis points to 9.345%.

Stocks were lifted by Ramaphosa’s plan, pushing retail, leisure and construction stocks higher as they stand to benefit from the projected 800,000 jobs and infrastructure building programme.

The benchmark Top 40 index closed 0.38% firmer at 50697 points and the All-Share index rose 0.37% to 55,047 points.

The general retail and consumer goods sectors were among the main gainers, rising 1.29% and 1.89%respectively, while casino and hotels firms Tsogo Sun Gaming jumped 8.22% and Sun International rose 1.76%.