South African ends week on a high after renewed sentiment, stocks up

0
756

JOHANNESBURG – South Africa’s rand firmed on Friday, capping a positive week with sentiment lifted by Chinese commitments to invest billions of dollars in a moribund economy that badly needs a kick start.

At 1530 GMT the rand traded at 13.18, 0.50 percent firmer than its previous session close and on course for gains of around 2 percent this week.

On Tuesday China’s President Xi Jinping and South Africa’s President Cyril Ramaphosa announced that China would invest $14.7 billion in the local economy, lifting the rand ahead of the three-day BRICS summit which ended today.

“The currency was lifted by news of new Chinese economic stimulus measures, which supported emerging market sentiment, and promises of billions of dollars of new Chinese investments in major South African state-owned enterprises,” analysts at NKC African Economics said in a note.

Sentiment was also helped by remarks by South African Reserve Bank Governor Lesetja Kganyago, who said on Friday that the bank does not expect the economy to shrink in the second quarter as it did in the first.

In fixed income, the yield for the benchmark paper due in 2026 was down 0.45 basis points to 8.580 percent.

On the bourse, shares rose in line with a global stock market rally as transatlantic trade tensions eased after an agreement between the United States and Europe this week.

The blue-chip Top-40 index closed up 0.83 percent at 51,126.90 points, while the broader All-Share index ended 0.74 percent higher to 57,162.38 points.

tagreuters.com2018binary_LYNXMPEE6Q1DJ-OZABS-BASEIMAGE