South Africa's rand hit another 35-month high against the dollar on Friday, continuing a recent rally that has been fed by rising risk appetite, while local stocks edged lower in holiday-shortened trade.
|||South Africa's rand hit another 35-month high against the dollar on Friday, continuing a recent rally that has been fed by rising risk appetite, while local stocks edged lower in holiday-shortened trade.
The rand traded at a session high of 6.7350 to the dollar, hitting a new record high for the year, just shy of the January 2008 high of 6.7175.
At 12:30 SA time the rand traded at 6.7530 to the dollar, not far off its close of 6.7590 on Thursday.
Foreign inflows searching for higher yield have helped to support the rand, which has appreciated 28 percent against the dollar so far this year.
“The stronger rand trend is continuing,” said Ian Martin, a trader at Rand Merchant Bank.
“It's going to drift stronger till the end of the year, I think the foreign funds pretty much will keep it stronger.”
The rand's short-, medium- and long-term moving averages point to further gains in the currency. It also broke through key levels of resistance at 6.80 and the October high of 6.7624 in the session, opening up the chance of a retest of 6.71.
One the bourse, investors sold some recent gainers such as Shoprite on concerns advances may be overdone.
The blue-chip Top-40 index finished down 0.32 percent at 28,582.68. Trade on Johannesburg Stock Exchange was a half day, ending at 1030 GMT, ahead of the Christmas holiday.
The broader All-share index .
The Top-40 index is up 15 percent so far this year
“There is still an underlying positive view in our market,” said Abri du Plessis, chief investment officer at Gryphon Asset Management.
Traders have said they expect further international demand for South African equities in the coming year, given the better prospects for growth in developing markets.
Shares of Shoprite fell 1 percent to 99 rand. The retailer is the fourth-best performer on the Top-40 so far this year, having risen more than 52 percent.
The Top-40's best performer this year, retailer Truworths , fell 1 percent to 70.22. Truworths has gained nearly 64 percent this year.
Other notable movers included Vodacom , South Africa's largest mobile operator, which fell nearly 2 percent to 72.75 rand. Shares of the company are up more than 12 percent so far this month.
Government bonds yields were steady, closing at 7.40 percent on the benchmark 2015 note and at 8.38 percent on the 2026 issue. - Reuters
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