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Johannesburg - A semblance of calm returned to financial markets on Thursday, after panic selling of the rand on news of the ANC's proposal at its policy conference that the South African Reserve Bank be nationalised.
Share prices on the JSE were modestly higher by mid-morning and the rand recovered somewhat, after Reserve Bank governor Lesetja Kganyago explained that the shareholding of the Reserve Bank has no bearing on the policy or regulatory role that the bank plays.
Financial shares, which will be most affected by uncertainty regarding the Reserve Bank’s role, were the best performers with the Financial index already 0.51% higher by mid-morning.
The Industrial and Resources indices, which include most of the dual-listed shares which normally benefit most from a weaker rand, were both only modestly higher.
The Industrial index was only 0.08% higher, while the Resources index gained 0.44% after the rand traded at R13.38 to the dollar. This is still lower than Wednesday morning’s level, but much stronger than the low of R13.55 later in the afternoon after the market heard of the ANC's draft resolution, which is still to be submitted to the ANC elective conference at the end of the year.
At mid-morning the All-share index was 0.33% higher at 52 657 points, while the Top 40 index gained 0.30% to 46 382 points. The All-share index lifted more than 2% over the seven days before Thursday’s trade.
Kganyago explained on Thursday that the Reserve Bank is one of a few central banks in the world which still have private shareholders, but they have no influence on monetary policies. He says the Reserve Bank is a public institution that derives its mandate from the Constitution.
“Any notion that a change in the shareholding of the SARB will amount to a higher degree of control over the SARB is incorrect. Even with a change in shareholding, the SARB will continue to derive its primary mandate and independence from sections 224 and 225 of the Constitution of the Republic of South Africa, a mandate it must carry out without bowing to any pressure, whether it be political or from the private sector,” he said.
READ: South Africa's 1920s central bank quirk targeted in push by ANC
Some commentators fear government will try and control Reserve Bank monetary policies if it owns the bank, but the policy conference also reiterated the bank's independence.
Banking shares - which are still lower than six months ago, after they dropped sharply on the news of Pravin Gordhan's axing as minister of finance - were among the busiest shares on the JSE on Thursday and traded mostly higher.
FirstRand [JSE:FSR] at mid-morning was 1.51% higher at R48.93, after almost 3 million shares were sold in 1 548 transactions for more than R192m. There were 50% more transactions in FirstRand shares than any other top share. Before Thursday's trade FirstRand was 9.67% down over the past six months.
Barclays Africa [JSE:BGA], which lost 15% of its value over the past six months, was 0.01% softer at R14.76. Nedbank [JSE:NED], which shed 12.6% over the previous six months, traded 1.12% stronger at R211.37.
Standard Bank [JSE:SBK] has been the best performer among the top four banks, losing only about 3% over the past six months. It gained 0.97% to R148.07 on Thursday morning.
Naspers [JSE:NPN], which dropped sharply two days ago in response to a steep fall in Tencent’s share price, traded higher for the second day - but only just. The share price gained only 0.17% to R2534.17, but earlier traded as high as R2 547. Tencent - in which Naspers has a 34.4% stake -was 0.30% higher in Hong Kong.
Mobile shares were in demand and MTN [JSE:MTN]gained 0.48% to R118.10. Vodacom [JSE:VOD] traded 0.37% higher at R167.00.
BHP [JSE:BIL], which gained more than 7% over the past seven days, traded 1.53% higher at R216.67. Anglo American [JSE:AGL] gained 0.68% to R184.68.
