Rand firms; Clover shines in flat stock market

The rand firmed on Friday, tracking a broad rally in emerging markets, as investors awaited the new finance minister’s medium-term budget speech and consumer price inflation numbers due next week.

Stocks ended the week flat, but shares in Clover Industries raced to their highest in almost two months after the dairy company said it is in talks over a total sale to an unnamed company. Clover closed more than 18% up at R16.70.

The rand was up 0.35% at 14.40 per dollar at 1506 GMT.

Emerging markets were buoyed on Friday by a surge in Chinese stocks after regulators mounted a coordinated campaign to try to put a floor under the tumbling market while a stronger Turkish lira also lifted sentiment.

The focus now turns to Wednesday’s budget speech by new finance minister Tito Mboweni and the September CPI data.

Africa’s most industrialised economy unexpectedly entered recession in the second quarter, but Mboweni is expected to stick closely to previous budget balance forecasts for the coming two financial years, economists predicted in a Reuters poll this week.

“Maintaining the current framework will be crucial if South Africa is to avoid a downgrade from Moody’s, which delayed its recent review in order to consider the speech,” said Capital Economics economist John Ashbourne.

Moody’s is the only one of the “big three” ratings agencies to rate South African debt at investment grade after last year’s downgrades to “junk” status by S&P Global Ratings and Fitch.

In fixed income, the yield on the benchmark government bond due in 2026 rose 4.5 basis points to 9.21%.

On the stock market, the blue-chip Top 40 Index and the all-share index were little changed. The Top 40 eased by 0.09% to 45 895 points while the all-share dipped by 0.08% to 52 093 points.

“In the short term, we have possibly hit a bottom or are about to, so from a technical point of view we should see a bit of a bounce in the market,” said BP Bernstein equities trader Vasili Girasis.