Rand rebounds from ‘no Zuma exit’ disappointment
The rand showed its disappointment that the ANC’s national executive committee (NEC) had not in fact voted to oust President Jacob Zuma on Friday night by weakening to R12.15 against the dollar from R12.01 on Monday, but had recovered back to R12.07 by 6.30am on Tuesday morning.
ANC secretary general Ace Magashule and his deputy, Jessie Duarte, told a news conference on Monday that reports that the NEC had agreed that Zuma should quit before the 2019 national elections were false.
The rand was at R14.81 to the euro, a recovery from R15.01 on Monday following Magashule’s statement, and at R16.89 against the pound, a recovery from R16.99.
Barclays issued an upbeat research note on the rand on Monday afternoon, saying it no longer expected Moody’s to downgrade SA’s sovereign rating to junk in March.
"Within a month of being voted in as president of the ruling ANC, Cyril Ramaphosa has moved swiftly towards delivering on his promises to root out corruption from government, support the independence of state institutions, fix the prevailing governance and other challenges at poorly performing state-owned enterprises and prepare the ruling party for the upcoming 2019 elections," Barclays said in its note.
"We believe that the decisive action taken at Eskom opens the door for more decisive action with respect to the fiscus. This, together with the recent bold moves by the country’s crime-fighting institutions such as the asset forfeiture unit of the National Prosecuting Authority to follow through with a number of high profile cases is likely to address rating agencies’ concerns about institutional independence and the potential impact of rising contingent liabilities on the fiscus."
Asian markets were cheered on Tuesday morning by the US Senate approving its fourth short-term funding bill since October, thereby ending a three-day "government shutdown" which forced civil servants deemed non-essential to go on a furlough.
Both Tokyo’s Nikkei 225 and Topix indices were up more than 1%, Hong Kong’s Hang Seng index was up 1.2% and Sydney’s S&P/ASX 200 was up 0.8%, which augurs well for the JSE to add to Monday’s 0.24% rise to 61,060 points.