CAPE TOWN - Have we ever had a Monday like this?… wondered Dynamic Outcomes head market analyst and director James Paynter as the rand was extremely volatile trading in a wide range of R14.13 to R15.55 yesterday.
“Well, what can one say? Simply hectic! Not since late 2015 and early 2016 have we seen such volatility,” said Paynter. “With volatility at these extremes, don't expect the roller coaster to slow down much this week – expect larger moves than the ‘normal’ average of 22c per day.”
At 5pm, the domestic currency was bid 26c weaker than Friday’s same time bid at R14.31 a dollar. Against the pound sterling the rand was 35c softer at R18.29 and to the euro, the currency eased 28c to R16.34.
The rand lost more than 10 percent overnight to R15.70 a dollar, its weakest in two years, according to corporate treasury manager at Peregrine Treasury Solutions Bianca Botes.
“While the rand is being subjected to global sentiment – or rather lack thereof – in the emerging market space, there is truly little that local policymakers can do to assist. The sell-off in emerging market assets will continue to be broad-based for now and all one can do is ride it out,” she said.
Botes said while Turkey continued to fight the strong headwinds of what many were branding a collapse of the lira, the Russian rouble was trading at its weakest levels since the 2015 oil crisis.
TreasuryONE senior currency dealer Andre Botha said all emerging markets were under severe pressure and the latest 10-year high inflation figure out of the US at 2.9 percent, and subsequent strength of the US Dollar added to the pressure.
“We have seen the rand hitting a high of R15.70 in overnight trade, but we have seen the rand recover… in early South African trade. The market is all over the place, and with this volatility, we could see rapid moves as par for the course until this flash crash, and its aftershocks subside out of the market,” said Botha.
Meanwhile, JSE stocks closed in positive territory with the blue-chip Top40 index notching up 0.47 percent to 51 821.39 points, while the broader all shareindex inched up 0.32 percent to 57 885.26 points.
Top gainers among major movers were RCL Foods, which scored 7.06 percent growth to R18.20 followed by Anglo American, which increased by 3.43 percent to R307.50. Resilient added 3.02 percent to R56, while Kumba Iron Ore gained 2.82 percent to R298.09 and Fortress ticked up 2.75 percent to end the day at R16.06.
Leading losses were Sappi, which tanked 9.51 percent to R91.30 followed by Barloworld, which sank 5.38 percent to R119.89. Anglo American Platinum declined 3.59 percent to R408.46, while FirstRand fell 3.52 percent to R63.05 and Reunert ended the day 3.14 percent lower at R79.30.
- BUSINESS REPORT