Rand vulnerable as Zuma exit calls grow

Johannesburg - The rand weakened against the dollar on Monday and remained vulnerable to domestic political uncertainty as President Jacob Zuma faced calls to resign after a court ruling last week that he failed to uphold the constitution.

Stocks rose as investors bought high yielding assets after Friday's US strong jobs data suggested that the Federal Reserve could, for now, hold back on raising interest rates.

At 15:55 GMT, the rand was trading at 14.7350 per dollar, 0.31% weaker compared with its New York close on Friday.

"The rand has managed to hold below the 15.0000 level, but the price action would suggest that it remains vulnerable to any headlines, this as the local political situation remains unpredictable," Nedbank Capital analysts Mohammed Nalla and Reezwana Sumad said in a note.

The rand climbed to 14.6050 late on Friday, its strongest since early December, on speculation Zuma might quit over the fallout after the court ruling.

The currency however gave back most of the gains after Zuma only gave a limited apology and the ruling African National Congress (ANC) reaffirmed its support for him.

The ANC held crisis talks on Monday to discuss the fallout from the court ruling, with parliament scheduled to debate a motion to impeach Zuma on Tuesday afternoon.

In fixed income, the yield for the benchmark instrument due in 2026 was flat at 9.145%.

On the bourse, the benchmark Top-40 index closed 0.6% higher at 45 772.49 points, as the wider All-share index also gained 0.6% to 51 895.14 points.

"Stocks are a little bit firmer, interest rates are not moving up in the short-term and it looks like investors are buying emerging stocks again," said Cratos Capital trader Greg Davies, referring to US interest rates.

Among the gainers were banks and retailers. Capitec Bank was up 3.51% at R593.20, while Shoprite gained 1.64% to R177.

Trade was thin, with 180 million shares changing hands, well below last year's daily average of 296 million shares.