The rand fell more than 2% on Monday after Public Protector Busisiwe Mkhwebane controversially recommended amending the Constitution to change the mandate of the Reserve Bank.

Although most analysts said it was unlikely the recommendation would be implemented, the rand initially fell sharply before recovering as ratings agencies regard the Bank’s independence as a positive factor in their analysis of the South African economy.

The rand was at R12.92/$ in early evening trade, from R12.7844/$ after weakening to R13.0558/$ in intraday trade.

Nomura emerging markets investment economist Peter Attard Montalto said that a constitutional change to shift the Bank’s mandate from protecting the value of the rand in favour of the socioeconomic wellbeing of citizens was unlikely.

Attard Montalto said it was “a live-wire issue. Even if a change here is not likely to actually occur, the risk of it is important to markets and ratings agencies.”

Bond yields rose as prices fell on foreign selling. The R186 was bid at 8.53%, from 8.47%.

Ratings agencies have previously cited the independence of the Bank as one of the institutional strengths that counts in the country’s favour.

Mining stocks held up well in JSE trade after sharp falls on Thursday, following the release of the revised Mining Charter.

Gold shares were weaker, but the resources and platinum indices were higher on the weaker rand.

“The mining sector is pricing in a delay in the implementation of the Mining Charter,” said Capicraft Investment Partners analyst Drikus Combrinck.

He said the envisaged court challenge could drag on for years, nullifying some of the onerous stipulations in the charter. “Local mining companies already have most of their assets and activities offshore anyway,” Combrinck said.

Analysts warned that the picture could change in the short term as the third Mining Charter included stipulations that could affect investment sentiment. These included a black ownership requirement of 30% — up from a previous 26%.

The JSE all-share index ended the day in positive territory, firming 1.54% to 51,615.90. Last week, the index recorded its worst weekly losses for 2017.

“The rebound was to be expected given that were are in an oversold territory in the short term,” said Afrifocus Securities portfolio manager Ferdi Heyneke. After losing 4% on Thursday, the platinum index rose 1.01%.

Resources were up 2.02%, after losing 2.05% on Thursday.

Glencore closed 3.34% higher at R47.68 and BHP firmed 2.79%, to R194.44. Anglo American strengthened 0.34% to R163.87. African Rainbow Minerals was 2.49% higher at R75.83. Harmony Gold lost 3.25%, to R22.06.

Banking shares came under sustained pressure, with Barclays Africa the big loser after Mkhwebane said government should recover R1bn from Absa for the Bankorp lifeboat.

After losing nearly 3%, Barclays Africa ended the day 1.12% off at R144.86.

Industrials rose on a strong performance from Naspers, which jumped nearly 4% in response to a trading update indicating an expected 4%-10% rise in headline earnings a share for the year to March.

At the JSE’s close, the gold price was 0.42% lower at $1,248.12/oz on the stronger dollar, while platinum had eased 0.52% to $921.71.

Gold had traded at a three-week low after the US Federal Reserve raised interest rates last week, said TreasuryOne analyst Gerard van der Westhuizen.


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