Rand gains for a sixth day in a row
The rand gained for the sixth consecutive session on Thursday, with the JSE closing firmer amid mixed global peers as investors consider the US inflation and interest rate outlook.
Softer US inflation and retail numbers released on Thursday supported sentiment as investors become optimistic that the Federal Reserve would cut interest rates this year.
“The confluence of weaker-thanexpected US retail and inflation data precipitated a broad relief rally across risk assets,” said RMB analysts. “Fed funds futures somewhat repriced rate expectations, reinforcing odds for a September Fed policy rate pivot while also lifting the likelihood of an earlier July pivot, though this is not yet the baseline futures market view.”
The JSE all share gained 0.19% to 79,508 points and the top 40 put on 0.1%.
At 6.15pm, the Dow Jones industrial average was up 0.29% to 40,022 points and the S&P 500 0.23%, while markets were mixed in Europe.
Meanwhile, industrial production has improved globally and commodity prices advanced over the second quarter. Metals prices rose 9.8% in the first two months of the quarter, versus the first two months in the first quarter.
Investec chief economist Annabel Bishop said the rand continued to strengthen, “with the increase in industrial production benefiting the rand, which is also a commodity currency. The rand has consequently strengthened, lifting on both the improvement in commodities prices, and the easing of port and electricity capacity constraints, with commodity currencies benefiting in general from higher prices”.
At 6.30pm, the rand had strengthened 0.33% to R18.1984/$ — reaching an intraday best of R18.1778. It firmed 0.44% to R19.7879/€ and 0.43% to R23.0684/£. The euro was 0.14% weaker at $1.0874.
Shares in Nampak rose as much as 18% in intraday trading after the company announced it has signed a $68.5m (R1.25bn) deal to dispose of Bevcan Nigeria, as it pushes ahead with its asset disposal plan to raise R2.6bn to settle its debt.
The packaging group said that through Nampak Nigeria Holdings and Nampak International, it had entered into a share purchase agreement with Alucan Investments to dispose of the entire issued share capital of Nampak Bevcan Nigeria.
As part of the deal, which still requires shareholder and regulatory approvals, Nampak will assign and transfer shareholder loans advanced by Nampak International to Bevcan Nigeria. The company’s share price closed 14.46% firmer at R190.
Gold lost 0.41% to $2,381.82/oz and platinum 1.14% to $1,067.7/oz. Brent crude was 0.44% firmer at $83.12 a barrel.