Market News

South Africa's rand, stocks recover after sinking on Omicron worries - REUTERS

NOVEMBER 29, 2021

JOHANNESBURG, Nov 29 (Reuters) - South Africa's rand firmed on Monday, recovering from last week's plunge to its lowest since October 2020 on concerns around the discovery of a COVID-19 variant in the country that has been described as the most concerning.

Stock markets also recovered, after hospitality shares fell sharply on the news a host of countries would bar travel from southern Africa, hitting hopes of a bumper season for a tourism industry already hurt badly by the pandemic.

At 1504 GMT, the rand traded at 16.1900 against the dollar, 0.61% firmer than its close on Friday, when it sank to 16.3675.

Global authorities reacted with alarm on Friday to the new variant, Omicron, which was detected in southern Africa, with the EU and Britain among those tightening border controls as scientists sought to find out if the mutation was vaccine-resistant. read more

With little yet known about the new coronavirus strain, market participants remained cautious.

"While the initial knee-jerk of the variant seems to be over, we still see some vulnerability in the EM market, with the stronger dollar posing a risk," Andre Cilliers, currency strategist at TreasuryONE, said in a note.

"It will also be a boon to the local market as the President (Cyril Ramaphosa) did not announce any new lockdown measures in his address last night," he said.

Opting not to impose further coronavirus curbs, Ramaphosa said on Sunday that authorities were considering making COVID-19 shots compulsory for certain places and activities, as a rise in infections linked to a new variant threatened to become a fourth wave. read more

The Johannesburg Stock Exchange's All-Share Index (.JALSH) closed 2.03% higher, with investors welcoming the news that domestic tourism remained unaffected for now. The blue-chip Top-40 (.JTOPI) was up 1.91%.

The travel and leisure index (.JTRAV) jumped 5.12%, with hoteliers City Lodge (CLHJ.J), Sun International (SUIJ.J), which also owns the country's biggest casino chain, and Tsogo Sun Hotels (TGOJ.J) up 9.24%, 12.55% and 3.10% respectively after crashing on Friday.

"There is less panic in the market today, people overreacted. Although overseas visitors will be curtailed for a while still, domestic people aren't affected, we've not gone to the higher levels (of restrictions)," Wayne McCurrie, portfolio manager at FNB Wealth and Investments said.

Government bonds also recovered, with the yield on the benchmark 2030 maturity down 4 basis points to 9.860%. The yield hit 10% on Friday, its highest since early May 2020.

(This story has been refiled to update All share and Top-40 index levels)

Reporting by Olivia Kumwenda-Mtambo, Emma Rumney and Nqobile Dludla; Editing by Arun Koyyur, Toby Chopra and Alex Richardson


This website uses cookies We use cookies to personalise content and ads, to provide social media features and to analyse our traffic. We also share information about your use of our site with our social media, advertising and analytics partners who may combine it with other information that you've provided to them or that they've collected from your use of their services
Real Time Analytics