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The rand advanced for a fourth day and yields on benchmark bonds saw their biggest drop in six weeks as the ruling African National Congress headed for a victory margin that will strengthen President Cyril Ramaphosa’s hand as he pursues reforms to revive a flagging economy.
With 80% of the ballots counted, the ANC has about 57% of the national vote. A win of between 55% and 60% is expected to boost Ramaphosa’s position within the party and his ability to implement key changes.
Here is how the reform optimism is playing out in markets:
The rand has moved below its 50-day moving average and is making a charge at its 100-day moving average too. The 14.25/USD level is critical, says Matete Thulare, an analyst at FirstRand Bank. If the rand sustains a break below that level, the next target is 14.05. The currency was trading 0.9% firmer at 14.2154 per dollar by 11:12am in Johannesburg.
South Africa’s benchmark FTSE/JSE Africa All Share Index is gaining for the first time this week. The gauge rose as much as 1.7% on Friday, the steepest one-day jump since Jan. 9.
The yield on benchmark 2026 government bonds is down seven basis points to 8.48%, the biggest drop in six weeks. The yield on the country’s $2bn of Eurobonds due 2028 fell three basis points to 5.18%, the most on a closing basis since April 9.
The cost of insuring South Africa’s government debt against default fell for the first day in four and was trading at 187 basis points.
Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.