The worst is probably over for the rand, Nomura says, if Moody's keeps SA out of junk status
Nomura has gone from being the biggest rand bear to the biggest bull, targeting a move to the ‘lower 13s’ over six months
Nhlanhla Nene has been dropped from SA’s cabinet twice in three years — and his misfortunes have been the catalyst that turned one of the biggest rand bears into one of the biggest bulls. As the currency declined this week amid speculation that Nene would resign as finance minister, Nomura International recommended a long-rand position versus the dollar, entering the trade at R14.85/$ and targeting a move to the “lower 13s” over six months. That compares with a median forecast of R15.14/$ in a Bloomberg survey of 24 analysts, and would place Nomura among the four most bullish forecasters. That’s quite a turnaround from January 2016, when Nomura predicted the rand would slump to R19/$, from about R16/$, after then President Jacob Zuma had unexpectedly fired Nene as finance minister the previous month. That compared with the R15.30/$ median call of 32 analysts in a Bloomberg survey at the time, and would have positioned Nomura as the most bearish among them. While Nomura described Nen...
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