SA stocks ride ZAR wave as vaccine optimism buoys financial markets
The Johannesburg Stock Exchange (JSE) reached its highest level since August this year. Investors are starting to see the potential in Emerging markets as negative outlooks are shifting. Investors were once worried that Africa would lag behind in vaccine distribution and have a much delayed recovery. Aspen recently announced that it will bring a Johnson& Johnson vaccine to South Africa for large scale manufacture, quelling those fears. Market participants also held back as the US elections ran their course, waiting for the effect on emerging markets. The US Dollar has weakened, giving the South African currency a 2,5% boost. What was a shadowed place now glistens with enticing bright spots. – Melani Nathan
SA stocks at 3-month high as vaccine news spurs rally
By Adelaide Changole
(Bloomberg) –South Africa's main stock gauge extends gains on Monday, rising as much as 2.8% to the highest since Aug. 6, after progress in the development of a coronavirus vaccine sparked a rally across financial markets.
"The announcement of a highly effective vaccine removes some of the long-held concerns that the economic disruption caused by the Covid-19 pandemic would persist indefinitely," says Lester Davids, an investment strategist at Sharenet Securities. "On this basis, we are seeing mass buying across most risk assets, in both developed and emerging markets."
The gains come as markets cheer the "certainty around the U.S. presidential election" after Joe Biden's win, Davids says. Some investors speculate that Biden's victory could deliver a better trade relationship with U.S.-China and another economic stimulus package could be in store. "To a certain extent it may also be driven by some short covering by market participants who may have anticipated that the outcome of the election would lead to selling pressure," Davids says.
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