Rand finds calmer territory after Tito Mboweni’s appointment
The market’s attention will now turn to the medium-term budget policy statement that the finance minister is due to deliver on October 24
The rand was relatively calm at R14.55 to the dollar on Wednesday morning, settling down after Tuesday’s wild mood swings on the switch of finance ministers.
First Nhlanhla Nene’s resignation sent the rand sliding 1.4% to R15.05/$ from about R14.84/$, then the appointment of Tito Mboweni as SA’s new finance minister saw the currency rally 3.4% to the R14.55/$ it was trading at on Wednesday morning.
The rand was trading at R16.75 to the euro and R19.15 to the pound at 6.30am.
The market’s attention will now turn to the medium-term budget policy statement (MTBPS) that Mboweni is scheduled to deliver in parliament on October 24.
“The MTBPS is largely locked down and agreed by cabinet and so we see little scope for change with Mboweni’s arrival. The speech can be tuned to his personal style, of course, but less so the substance,” Intellidex analyst Peter Attard Montalto said in a note e-mailed on Tuesday.
“Overall there is a complex political game going on which has claimed its first scalp — this is a victory for EFF ultimately but also convenient for the Zuma and Mabuza factions within the ANC. We should not lose sight of that and is why we think the positive market reaction will likely [fade by] … the MTBPS.”
Attard Montalto warned that Mboweni while Reserve Bank governor got into trouble for various incautious public statements, and some of his Twitter posts have already come back to haunt him.
In one tweet he argued that the state should own 40% of all mining companies.
“The media and opposition parties will create a lot of noise around the MTBPS about these historic views.”
Asian markets were generally flat ahead of the JSE’s opening on Wednesday morning. Tencent’s slide continued, with Naspers’s major asset down 0.95% to HK$291.
In Sydney, BHP was up 0.27% to A$34.72.