The all share experiences its biggest intraday rally in more than three years and the rand strengthens to a day’s best of R11.59 to the dollar
15 FEBRUARY 2018 – 20:42 by MAARTEN MITTNER
A surge in the JSE saw local banks benefit most on Thursday, courtesy of the swearing-in of Cyril Ramaphosa as president.
The all share experienced its biggest intraday rally in more than three years in what verged on euphoric trade at times. The rand strengthened to a day’s best of R11.59 to the dollar, a level last seen in February 2015.
After rising more than 4% at one stage, the all share closed 3.72% higher at 59,533.10 points, the biggest one-day gain since December 2014, in the first day of trade after the resignation of Jacob Zuma.
The banking index rose 5.78% and general retailers 4.17%. Local banks were the main gainers, as an inflow of foreign money boosted the sector. Shares in all the four big banks reached record highs during the day. Overall gains were broadly-based, with rand hedges and miners also rising despite the rand’s good gains. The currency is now up about 6% to the dollar so far in 2018.
Financials and platinum stocks rose more than 3%. Analysts described the renewed interest as unprecedented. “Zuma’s resignation ended the persistent political risk element that has clouded SA for a long time,” said FXTM analyst Jameel Ahmad said.
The international news media’s reaction to Zuma’s decision to step down saw the country draw huge levels of exposure, global media monitoring firm Meltwater said.
According to data, in the 24 hours before Ramaphosa’s election as president, more than 20,000 articles covering Zuma’s exit were published across the world. The US saw close to triple the number of news stories published than in SA, a third of which forecast the appointment of Ramaphosa as SA’s new president. “This may have contributed towards the strength in the rand,” said Meltwater analyst Matthew Barclay.
Ramaphosa’s election was the main news among top media outlets, including the BBC, The Guardian and the Financial Times.
At 8pm, the rand was at R11.61/$. Bond yields fell to their best levels so far in 2018, with the R186 bid at 8.255%, from mainly offshore buying.