South Africa’s Rand Extends Rally to 4-week High, Stocks Up

JOHANNESBURG (Reuters) – South Africa’s rand rose to a four-week high on Wednesday backed by a better-than-expected jump in second-quarter growth and improved risk sentiment globally, brushing off concerns over anti-immigrant protests.

Stocks gained led by Naspers.

At 1545 GMT the rand was 1.91% firmer at 14.8025 per dollar, its firmest level since Aug. 6, extending the previous session’s rally.

Gross domestic product in the three months to June expanded by 3.1%, after a 3.1% contraction in the first quarter. Economists polled by Reuters had forecast an expansion of 2.4% for the quarter.

The positive growth data helped soothe sentiment battered by recent signs of weak activity and concerns that an additional 59 billion rand ($3.9 billion) for state power firm Eskom had made a credit downgrade a near-certainty.

President Cyril Ramaphosa told officials and business leaders on Wednesday that he was committed to quelling attacks on foreigners that have threatened to cast a cloud over an economic forum aimed at boosting intra-African trade.

Police have arrested almost 300 people and confirmed at least five deaths after riots in Johannesburg and the capital Pretoria in recent days, when roving groups attacked shops mainly owned by migrants from the rest of Africa.

On the bourse, the broader All-share index rose 0.3% to 54,907 points, while the blue chip Top-40 closed 0.32% up to 49,031 points.

Leading the blue chips was e-commerce giant Naspers, up 2.69% to 3594.00 rand after gains in Hong Kong stocks boosted Tencent, in which Naspers has a stake. [nL3N25V0NC]

“Naspers is such a big component of the JSE and its sibling child Tencent is listed in Hong Kong…People think the worst of the protests in Hong Kong are over. That lifted all the stocks really,” said Greg Davies, a trader at Cratos Capital.

Further gains were restrained by the bullion sector, down 5.09%, with Sibanye-Stillwater down 4.94% to 19.44 and AngloGold Ashanti 5.09% lower at 334.91%.

Bonds also firmed, with the yield of the benchmark paper due in 2026 down 5 basis points to 8.095%.

($1 = 15.2369 rand)

(Reporting by Olivia Kumwenda-Mtambo and Onke Ngcuka; Editing by Mark Heinrich)