South African rand edges up on vaccine progress, stocks slide

JOHANNESBURG: The rand edged up on Tuesday, supported by progress in South Africa's coronavirus vaccine purchases and an easing of lockdown restrictions, while stocks slipped slightly.

At 1515 GMT the rand was 0.36% firmer at 15.0300 against the U.S. dollar, after earlier dipping below 15.00.

The rand's attractive yield, or carry, compared to other emerging market currencies, continued to shield it from being negatively affected by signs of a weak local economy.

Factory activity data on Monday showed demand remained tepid in the continent's largest economy, while new car sales figures contracted again, falling 13.9% in January.

Market sentiment was boosted by the arrival of South Africa's first batch of COVID-19 vaccines, one million doses of the AstraZeneca shot.

In a speech during which he lifted some coronavirus lockdown restrictions, President Cyril Ramaphosa said the country had secured almost enough doses to vaccinate its target of 40 million people, or two-thirds of the population.

"Mr Ramaphosa delivered good news on the vaccines front, but it remains to be seen if the country's notoriously inefficient bureaucracy can handle the massive undertaking that is inoculating two thirds of the population by year-end," Louw Nel at NKC African Economics said in a note.

The stock market retreated after early gains as mining companies lost steam even as investors stayed bullish on the prospects of a faster economic recovery with eyes on the U.S. stimulus aid.

The benchmark all-share index slipped 0.1% to end at 62,734 points while the blue chip top 40 companies index was down 0.15% to 57,585 points at 1500 GMT.

The diversified mining index slid 2.86% as platinum and gold prices dropped by over 2.8% and 1.3% respectively.

However, banking and financial stocks, often considered the true reflection of economic prospects, closed up more than 2%.

Bonds firmed, with the yield on the benchmark 2030 government issue ZAR2030= down 10 basis points to 8.545%.