South African rand hits two-month low, Naspers lifts stocks

JOHANNESBURG: The rand hit a two-month low on Monday as the US dollar gained on further stimulus hopes, while fears of tighter domestic coronavirus restrictions weighed on the South African currency.

At 1500 GMT, the rand was at 15.5800 versus the dollar, 1.86% weaker than its previous close, and trading at its weakest since Nov. 13.

"A stronger US Dollar and a worsening COVID-19 situation in South Africa could see a break above resistance toward the November swing high at 15.7357," Warren Venketas, an analyst at IG in Johannesburg, said in a note.

South Africa's President Cyril Ramaphosa was due to address the nation on the government COVID-19 response at 1800 GMT, as record-high infection rates raised fears of lockdown measures.

The rand slumped around 4% against the US currency last week, as sentiment soured over a new peak in daily coronavirus infections and doubts over vaccine supplies.

South Africa has recorded more than 1.2 million COVID-19 cases, the most on the continent, but it is yet to start vaccinating its population or receive its first doses.

A sluggish vaccination programme would dent prospects for recovery in an economy that is forecast to have contracted by at least 7% last year.

Stocks ended firmer after a volatile session as anxious investors positioned their bets ahead of Ramaphosa's address, which Cratos Capital equities trader Greg Davies said might be "making investors a little bit uncertain".

But market heavyweights Naspers and its international arm Prosus kept gains intact, lifting the Johannesburg All-Share index up 0.38% and the Top-40 index up 0.5%.

Naspers climbed 4.31%, while Prosus rose 3.92%.

"We're having some rand weakness which is sort of keeping our rand hedges a little bit on the green side," BP Bernstein portfolio manager Francesco Sturino said.

Government bonds dipped, with the yield on the 2030 instrument rising 5 basis points to 8.84%.