Deputy President and ANC president Cyril Ramaphosa. File photo: ANA
JOHANNESBURG - The rand weakened yesterday in volatile trade as markets awaited the outcome of talks between the ANC leader Cyril Ramaphosa and President Jacob Zuma over a transition of power.

Stocks climbed as buyers came back into the banking and financials sectors which have seen a sell-off in recent weeks.

At 5.21pm the rand was 0.44percent weaker at R11.9650 to the dollar, having rallied as far as R11.8750 earlier in the session.

However, at 5pm, the rand bid at R11.9326 to the greenback, 9.51c firmer than at the same time on Tuesday.

Zuma, in power since 2009 and beset by corruption allegations, has been in a weakened position since Deputy President Ramaphosa replaced him as ANC leader in December. Ramaphosa has talked of a transition of power since he took over as leader of the ANC.

“The political drama in South Africa continues,” Commerzbank analysts said in a research note. “At present it looks as if the Zuma era is finally nearing its end, which would of course be good news for the rand.”

The rand has tended to strengthen on signs that Zuma could step down early.

Bonds were firmer, with the yield on the benchmark paper due in 2026 down 7 basis points to 8.4percent.

On the bourse, the benchmark JSE Top40 index rose 0.65percent to 50182.35 points, while the all share index was up 0.9percent to 56886.45 points.

The banking sector gained 3.42percent and financials lifted 4.4percent as buyers came back into previously hard hit shares, with the blue chip Top40 index closing up for the first time in more than a week.

Nedbank advanced 5.87percent to R269.96, FirstRand gained 3.64percent to R66.94 and Standard Bank strengthened 2.71percent to close at R199.

“They were the ones that were knocked down the most in the sell-off so they the ones where the recovery is,” said Cratos Capital equities trader, Greg Davies.

Further gains were curbed by the resource sector which came under pressure amid a stronger rand, with Impala Platinum weakening 6.32percent to R30.07 and Harmony Gold down 2.08percent to R19.75.

- REUTERS