Foreign investors cheer Ramaphosa presidency
The rand’s Ramaphosa rally picked up pace in Asian trade in the early hours of Friday, with the currency comfortably under R11.60 to the dollar as SA woke up.
The rand was trading at R11.57/$ at 7am, 3.5% stronger than the R12.01/$ where it was on Monday before the events that led to Cyril Ramaphosa replacing Jacob Zuma as SA’s president unfolded.
Friday morning’s level was 20.5% stronger than the R14.58/$ it was trading at in November when the Ramaphosa rally began.
The rand was at R14.52 to the euro and R16.37 to the pound.
The yield on the benchmark R186 10-year South African government bond fell 20.5 basis points to 8.18% following Ramaphosa’s swearing in as president — meaning investors are seeing SA as less risky than Mexico for the first time in history, Bloomberg reported.
"SA has always been the underdog that you would definitely avoid, and Mexico was a darling of emerging-market investors for more than two decades. And now the preconceived argument in these two countries has completely turned upside down," Mirabaud Asset Management’s head of global emerging-market debt, Daniel Moreno, told Bloomberg.
JSE data e-mailed on Friday morning showed foreign investors bought R5.5bn worth of top 40 company shares while selling R3.7bn worth.
Banks, which suffered most under Zuma’s disastrous choices of finance ministers, were the most popular stocks among foreign investors on Thursday, helping the JSE’s banking index jump 5.78% to 10,480 points.
Foreigners bought R896.6m worth of FirstRand shares, helping it rise 6.43% to R75.35.
Next most popular was Barclays Group Africa, with R544.2m purchased, helping the share price rise 7.78% to R205.75.
Foreigners also bought R416m worth of Standard Bank shares, helping it rise 5.13% to R218.60; R234.8m worth of Capitec, helping it rise 2.1% to R830; and R70m worth of Nedbank, helping it rise 5.37% to R290.83.
Nedbank issued a media statement on Thursday night congratulating Ramaphosa on his appointment as SA’s president.
"We urge him to appoint individuals of integrity [to the Cabinet] who can be trusted to implement the ambitious structural reforms we sorely need," Nedbank CEO Mike Brown said in the statement.
"Faced with a dramatic deterioration in the country’s finances, there is no time to lose. SA urgently needs clear interventions to help the economy recover, resume its growth path and regain the all-important focus on job creation."