Markets inch higher as rand weakens on Public Protector recommendation | Fin24
 
  • Load Shedding Schedules

    Find information for Johannesburg, Durban, Cape Town and other cities.

  • Lockdown

    Once restrictions are lifted, will customers return to SA's malls?

  • Exchange Rates

    The rand is approaching the R20/$ mark. Here's why you should care.

Loading...

Markets inch higher as rand weakens on Public Protector recommendation

Jun 19 2017 18:03
Musa Makoni, Trading desk at EasyEquities

Cape Town - The JSE closed firmer, taking a leaf from other major global equity markets which indicated a sea of green in Monday’s trading session. Our local market managed to trade higher, bolstered by the weaker rand which led to rand hedges trading firmer.

The rand weakened to just above R13 against the greenback, after the Public Protector suggested that a process to change the Constitution to alter the SA Reserve Bank’s primary objective should be initiated.

Some of the proposals include that the SARB hold regular consultations with Parliament to achieve meaningful socio-economic transformation, and a change from its objective to “protect the value of the currency”, to “promoting balanced and sustainable economic growth in the Republic while ensuring that the socio-economic wellbeing of the citizens are protected”.

The weakness in the rand was as a result of the fear that the SARB’s independence to undertake effective monetary policy is going to be severely compromised, should the recommendations be pursued. The rand did manage to bounce off from the lows that were recorded as a result of this announcement, and the USD/ZAR was trading at R12.93 when the JSE closed.

The JSE All-Share Index closed 1.54% firmer, with the blue chip Top-40 index closing up 1.95%% led by Mondi Ltd and Mondi PLC which closed up 6.2% and 5.94% respectively. The Top-40 was also buoyed by Naspers which closed 3.88% firmer, after its associate, Tencent Holdings, closed up 2.27% on the Hang Seng. Most of the major indices on the JSE closed in the green, with the Resources Index closing up 2.02% and Industrials firming 1.93%. The Financials Index also closed firmer despite the relatively weaker rand and the index was up 0.71%.

Gold continued to trade lower and managed to break below the price of $1250 per ounce. This break was after US Fed governor, William Dudley, reiterated that the Fed was happy with the current level of unemployment and inflation, and that the US economy was close to full employment. This set the tone for strengthening of the US dollar which inversely resulted in a minor sell-off in gold. At the JSE close, gold was trading at $1248.52 per ounce.

Read Fin24's top stories trending on Twitter:

equities  |  sa economy  |  markets  |  currencies
NEXT ON FIN24X

 
 
 
 

Company Snapshot

Voting Booth

Do you support a reduction in the public sector wage bill?

Previous results · Suggest a vote

Loading...