JOHANNESBURG: South Africa’s rand weakened on Monday, giving back early gains in volatile trade with sentiment swinging against riskier currencies as the reality of a slow rollout of coronavirus vaccines dampened demand.
At 1500 GMT the rand was 0.46% weaker at 15.2400 per dollar, marking a third consecutive session of losses as investors took a more circumspect view of the pace of the global economic rebound.
Last week the rand clawed its way to a two-week best of 14.8600, spurred by vaccine hopes, as well as the United States $1.9 trillion fiscal stimulus plans and the likelihood of developed market central banks keeping liquidity taps open.
The Johannesburg Stock Exchange’s Top-40 index reached an all-time high on Monday, driven in part by exchange heavyweight Naspers and subsidiary Prosus as well as retailer Woolworths.
The Top-40 closed 0.89% higher at 59,409 points. The broader All-Share index also closed up 0.89% at 64,560 points.
Bonds also weakened, with the yield on the benchmark 2030 government bond up 2 basis points at 8.795%.
Shares in Woolworths led the assent, soaring just over 13% and closing almost 11% higher after it forecast an unexpected surge in profits, joining other South Africa retailers in bouncing back from a hefty blow dealt by the coronavirus pandemic.
It was followed by Naspers and Prosus, which closed 6.3% and 6.1% higher on the back of a similar jump in the stock of Chinese tech giant Tencent. Prosus holds around one-third of its shares.
But signs of slow progress in rolling out vaccines locally and in Europe, and the impact of ongoing lockdowns, have offset those hopes.
“Price action will likely remain skittish, as the rand is vulnerable in the short term,” Nedbank analysts said in a note. “Focus is on the potential US stimulus package, and any deviation from this could see the rand test the upper end of the ranges.”
Comments
Comments are closed.