South Africa's rand, stocks swept up in EM rally

JOHANNESBURG: South Africa's rand and shares firmed on Monday as emerging markets were boosted by hopes of more economic stimulus from China.

At 1530 GMT the rand was 0.83 percent firmer at 14.2800 per dollar, a little softer than a session-best 14.2575 that brought key resistance mark within touching distance.

Promises of tax cuts and coordinated official statements of support for stock markets in the world's second-largest economy saw Chinese shares stage their biggest one-day surge in three years, pulling other emerging markets higher.

South Africa's new finance Minister Tito Mboweni delivers his maiden budget on Wednesday amid a backdrop of recession,  ballooning debt and high unemployment.

A lingering emerging market selloff fuelled by political ructions in places like Turkey and Brazil also threatens to overshadow what is seen as a showcase event for President Cyril Ramaphosa economic recovery plan.

"Budget week is big for South Africa, however, investors need to be aware of the potential risk element coming from Erdogan statement about the killing of a Saudi journalist. Likewise for the U.S. GDP reading," said Jameel Ahmad, head of currency strategy at FXTM.

In bonds, the yield on the benchmark government bond due in 2026 was down 4.5 basis points to 9.155 percent.

The Johannesburg All-Share index rose 0.21 percent to 52,204 points, while the Top-40 index strengthened 0.3 percent to 46,034 points.

"Chinese markets are flying, thanks to Chinese authorities saying they will do what needs to be done to support their private sector. Of direct importance to us is that Tencent is up 4 percent today," Vestact equities asset manager said in a note.

A rise in China's technology giant Tencent equates to a rise in market heavy-weight Naspers, which owns 31 percent of Tencent.

The e-commerce and pay-TV group closed 3.20 percent higher to 2,810 rand.

Platinum miner Lonmin rose 2.27 percent to 10.34 rand after it said it signed a $200 million metal purchase agreement, which will provide it better liquidity as it awaits the closure of Sibanye-Stillwater's takeover of the company.