South Africa's rand firmer on improved risk appetite, Naspers gains

JOHANNESBURG: South Africa's rand firmed on Thursday, recovering from a three-week low hit in the previous session, as investors dumped the dollar and jumped back into riskier assets.

Stocks began the new month on a high note after a brutal October as market heavy-weight Naspers extended gains.

At 1520 GMT the rand was 2.06 percent firmer at 14.4700 per dollar compared to Wednesday's close of 14.7750.

The rand caught a bloody nose on Wednesday after the trade balance swung to a deficit in September, pushing the currency to its weakest since Oct. 9.

The currency lost around 5 percent of its value against the greenback over October as emerging markets were battered by rising interest rates in the U.S. and global growth concerns.

In the absence of local market-moving data, investors are waiting for U.S. employment data on Friday which could reinforce the view that the U.S. economy is outperforming rivals, sending money back into the buck.

A Reuters poll found on Thursday that the rand is expected to trade just 2 percent higher in a year as local economic reforms kick in and support the currency, but it may be held back by a potentially more hawkish U.S. Federal Reserve.

Bonds also firmed, with the yield on the benchmark paper due in 2026 falling 9 basis points to 9.285 percent.

On the bourse, Naspers maintained gains from the previous session after index provider MSCI Inc said it would allow companies like Naspers, that give shareholders unequal voting rights, to remain on its current equity indexes.

"Staying in the MSCI indexes is a big deal, it increases the demand for Naspers' shares, which helps improve the share price," Vestact Asset Management said in a note.

Shares in Naspers ended the day 8.56 percent stronger at 2,814.72 rand.

The All-share index climbed 2.27 percent to 53,578 points, while the Top-40 index rose 2.42 percent to 47,256 points.

Other gainers included ArcelorMittal South Africa which rose 1.31 percent to 3.86 rand after it reported a 5 percent rise in quarterly liquid steel production.