The Johannesburg Stock Exchange. File picture: Siphiwe Sibeko
JOHANNESBURG - The rand surrendered some gains on Friday afternoon but remained near its three-year best ahead of Cyril Ramaphosa’s maiden state of the nation address later in the evening after he was sworn in as the country’s president.

At 5pm, the rand bid at R11.6399 to the dollar, 1cent softer than at the same time on Thursday, with some investors taking profits after the currency hit R11.56 earlier on in the session, its firmest since February 2015.

Other South African assets continued to rally, with bond yields on the benchmark at their lowest since December 2015, while five-year credit default swaps fell 3 basis points from Thursday’s close.

Analysts have referred to the effect as the “Ramaphosa rally” to refer to the buoyant market mood since was elected ANC leader in December.

On Wednesday Jacob Zuma resigned as president after weeks of pressure, ending a nine-year tenure punctuated by scandals, stagnant economic growth and policy uncertainty.

“The final steps happened very quickly. South Africa has already got a new president. At present the FX market is clearly relieved that Jacob Zuma has gone,” said analyst at German-based Commerzbank, Ulrich Leuchtmann in a note.

A former union leader, Ramaphosa has promised to fight corruption and woo foreign investors.

Analysts said the rand could push past pivotal technical milestones in coming weeks, with the annual budget speech due this week a key fixture on investors’ radar.

“It is quite possible that the dollar will weaken to below 11 against the rand for the first time since December 2014 over the coming weeks,” said head of currency strategy at FXTM, Jameel Ahmad.

Meanwhile, stocks dropped on Friday amid profit-taking after the main index hit a more than three-year high in the previous session.

The benchmark JSE Top40 index fell 0.86percent to 52110.8 points, while the all share index lowered 0.69percent to 59122.34 points.

The banking sector, considered the barometer of both economic and political sentiment, fell 1.1percent to lead the bourse lower on Friday after coming off record highs in the previous session.