Thursday, November 30, 2017

South Africa's Rand Firmer After Trade Data, Stocks Slide
Reuters Staff

* South Africa recorded trade surplus in October

* Renewed hopes of economic reform supports rand

* Naspers sheds more than 3 percent (Updates levels)

JOHANNESBURG, Nov 30 (Reuters) - South Africa’s rand firmed on Thursday, supported by a weaker U.S. dollar and data showing the country recorded a trade surplus for the ninth consecutive month in October.

Stocks were weaker as bourse heavyweight Naspers weighed.

At 1702 GMT, the rand traded at 13.5700 per dollar, 0.59 percent firmer than its New York close on Wednesday.

The currency has been volatile over the past month, slumping to its weakest level in 12 months against the dollar in late October following a gloomy budget speech that revealed a gaping revenue gap and public debt soaring to 60 percent of GDP.

But the currency has recovered in the past week on renewed hopes of economic reform despite a decision last Friday by S&P Global Ratings to push the country’s debt deeper into “junk”.

The revenue service said on Thursday South Africa’s trade surplus widened to 4.56 billion rand ($335 million) in October, thanks to a weaker rand and subdued demand for imports.

“Export growth continues to be supported by a moderate recovery in South Africa’s major trading partners as well as higher commodity prices, whereas the sluggish local economy is still keeping a lid on import growth,” said Elize Kruger at NKC African Economics.

“Both developments favourably impact on the trade balance, the current account balance and subsequently, also provide support for the rand exchange rate.”

In fixed income, the yield for the benchmark government bond due in 2026 was up 3 basis points to 9.32 percent.

On the stock market, the benchmark Top-40 index was down 1.3 percent at 53,270 points, while the broader All-share index shed 1.1 percent to 59,773 points.

E-commerce and media firm Naspers, which owns a third of China’s Tencent, retreated 3.2 percent to 3,687.71 rand.

Naspers shares have doubled this year as the value of Tencent soared - the stock mostly follows the movements of its Chinese investment, which was down more than 3 percent on the day.

Private hospital group Mediclinic was the biggest gainer among the blue-chips after investment banking firm Jefferies upgraded the company to “buy” from “underperform”.

Shares in Mediclinic rose 2.6 percent to 101.60 rand.

$1 = 13.6050 rand Reporting by Olivia Kumwenda-Mtambo and TJ Strydom; Editing by Tiisetso Motsoeneng

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