RAND STEADY ON SOFTER DOLLAR

THE RAND inched firmer on Friday as the dollar traded near multi-week lows, after a directionless week in which it took its cues from moves on global markets.

At 5pm the rand traded at R14.30 against the dollar, roughly 0.07 percent stronger than its previous close. However, this was 2 cents softer than at the same time on Thursday.

The rand has by far outperformed its emerging market peers, with gains of around 3 percent year-to-date against the greenback, owing largely the high real yield, or carry, on the currency that is a function of low inflation and high risk premium.

Higher commodity prices have also cushioned demand for the currency against rising US Treasury yields and some indications that lending rates there and in the euro zone are on their way up.

“Apart from commodity prices, the rand’s outperformance can be attributed to the elevated FX swap basis, which, from a currency perspective, is equivalent to about a 100bp (basis points) hike in the repo rate,” said currency analyst at RMB, Kim Silberman.

Government bonds dipped, as the yield on the 2030 instrument climbed 3.5 basis points to 9.16 percent.

In the equities market, stocks rose, led by property firms with the index up 2.47 percent as investors placed hopes on the progress of Covid-19 vaccinations at home and abroad, as it means people may start to frequent malls and offices more often.

Among the gainers were MAS Real Estate up 4.85 percent to R17.30, Vukile Property Fund up 4.37 percent to R10.50, EPP up 3.92 percent to R11.40, Attacq up 3.68 percent at R7.05, Investec Property Fund up 3.31 percent to R7.05 and Arrowhead Properties up 3.31 percent to R10.62.

The JSE all share index and the Top40 index both closed 0.48 percent firmer on 67 295.74 points and 61478.76 points, respectively.