South Africa's rand, stocks fall, but end 2020 stronger

JOHANNESBURG: South Africa's rand weakened on Thursday, the final trading day of the year, with investors opting for caution as coronavirus vaccine rollouts and hopes for stimulus in major economies offset concerns about a second wave.

The stock market, which closed at 1100 GMT, fell on the last trading day of 2020, but has rebounded from losses suffered earlier in the year.

At 1030 GMT the rand was 0.63% weaker at 14.7200, compared to an overnight close of 14.6275. Losses in the shortened session were the result of low volumes and profit-taking as traders to sought to close positions.

The currency is on course to end 2020 close to where it began the year, having rallied in the last three months, mostly because of external events.

The gains, also seen in other emerging markets, have been spurred by Democrat Joe Biden's victory in US polls last month and the development of COVID-19 vaccines, which have taken precedence over South Africa's economic problems.

Africa's most advanced economy also has the continent's highest number of coronavirus infections, with more than 1 million confirmed cases and close to 30,000 deaths.

"Rand outperformance has been notable this quarter with low global growth encouraging central banks to remain ultra-accommodative and keep financial markets liquified," said economists at ETM Analytics.

The fall in shares on Thursday was mainly attributed to investors squaring positions. The Johannesburg Stock Exchange (JSE) will reopen on Jan. 4.

The benchmark FTSE/JSE all-share index closed down 0.38% to end the year at 59,409 points. It closed the year up 3.6% after recovering over 56% from its March lows.

The bluechip FTSE/JSE top 40 companies index ended down 0.43% to 54,380 points. It had crossed its all-time high seen in 2018 in mid December and ended the year up 7%.

JSE's bank index, often considered a reflection of the local economy's prospects, ended 1.21% down on Thursday, and has lost a quarter of its market value since January.

Market heavyweight Naspers Ltd, which accounts for over 25% of the two main indexes, ended the year with a 30% return on its share price since January.