Rand unlikely to help banks
Good news is priced in and observers do not expect strong local unit to lift listed banking shares and retailers
Local banks and retailers on the JSE are not expected to benefit much from the stronger rand, with analysts on Friday saying commodities remained the preferred asset class for the year. This is despite the stronger rand traditionally benefiting banks and retailers because it reduces inflation. "I do not see much rotational activity among the asset classes as commodities were still expected to outperform this year," said BP Bernstein Stockbrokers portfolio manager Vasili Girasis. Although the rand could still firm to R12.80/$ over the short term after hitting R12.90 last week, it was overvalued at current levels, said Girasis. "The reward for risk taken on a 10c move in the rand may not be worth it," he said. Foreign investors seemingly do not foresee further rand strength in 2017 to boost the value of their local investments. Year-to-date outflows of bond and equity markets amount to about R20bn, with R18.6bn of those outflows from equities. "Foreign sentiment remains fickle," analy...
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