adminJohannesburg — The rand strengthened against the dollar yesterday along with its emerging market peers as investors expected the United States Federal Reserve to keep interest rates unchanged.
Mobile giant MTN dragged the Johannesburg Stock Exchange lower, as traders continued to sell shares after its Nigerian unit was fined $5.2 billion by the telecoms regulator.
At 1711hrs the rand firmed 1.1 percent to the greenback to R13.53/$, recovering from its weakest level in nearly a month.
Traders and analysts said the scope for major surprises in this evening’s Fed policy statement is limited with the odds of the Fed hiking only at 34 percent.
The local currency got a further boost from the weak dollar and a correction in the local market as investors took advantage of the expected dovish Fed message.
“There was some profit-taking from a couple of days ago and a somewhat dovish Fed message this evening is good for the rand,” said Bart Stemmet an economist at NKC African Economics.
The South African Reserve Bank said yesterday that the economy remains at risk from a United States interest rate due to its still rising levels of external debt.
Government bonds mirrored the local currency, with the yield on paper maturing in 2026 shedding 7 basis points to 8.31 percent.
On the bourse, South Africa’s Top 40 index fell 0.09 percent to 48,189 points while the All-share index inched down 0.03 percent at 53,755 points.
Traders continued to sell MTN’s shares after it was fined in Nigeria, its biggest market. Africa’s biggest mobile phone operator said it was in talks with Nigerian regulators to try to reduce the fine.
The firm’s stock closed 2.5 percent down to R155.85.
Capitec Bank was the best performer rising 3.7 percent to R599.90.
Trade as active with 191 million shares changing hands, above last year’s daily average of 183 million shares. — Fin24
Online Reporter