Rand extends fall after arrest warrant for ANC secretary-general

The rand extended its retreat from a more than 8-month high against the dollar on Tuesday, after police issued a warrant for the arrest on corruption charges of Ace Magashule, a top official of the governing African National Congress party

The rand traded at R15.62 against the US dollar at 1436 GMT, 1.48% weaker than its Monday close, as the South African currency fell despite world markets rising on positive news from drugmaker Pfizer on the search for a coronavirus vaccine.

Magashule, who told reporters he had done nothing wrong, is secretary-general of the ANC, in charge of day-to-day running of the party, and his arrest could have significant political ramifications if he has to take leave or resign.

Signs of instability within the ANC tend to hurt the rand, which had climbed to R15.21 per dollar on Monday, its highest level since March 5.

Government bonds also weakened, with the yield on the benchmark due in 2030 up 11.5 basis points to 8.845%.

Stocks, however, climbed further on optimism around a Covid-19 vaccine, which had sent shares soaring.

The All-Share index closed 0.45% higher at 52,923 points, while the benchmark Top 40 index rose 0.64% to 57,672 points.

“There was a strong outcome over the Pfizer vaccine which has caused fund managers to reposition their investments. As a result we are seeing banks and retailers benefiting from this,” said Greg Davies, a trader with Cratos Capital.

The banking index closed up 4.26%.

Gold shares were also among the gainers, rising 3.76% on the back of a recovery in the bullion price as investors bet on continued monetary support from central banks to revive a pandemic-hit global economy.