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Rand hovering around R13/$ in early trade

The rand was hovering around 13 to the dollar at 7am this morning as the market waited to see how the drama between President Jacob Zuma and Finance Minister Pravin Gordhan would play out.

While much coverage has been given to the rand’s swing from 12,32 to the dollar before President Zuma ordered Gordhan and his deputy, Mcebisi Jonas, to return from an investor roadshow in London to 13,05 to the dollar, perhaps more alarming is the 42 basis point rise to 8,73 percent on the yield on government’s benchmark R186 bonds.

According to Trading Economics, South African government debt is about $53,8bn, so Zuma’s move has added about $202m to the government’s annual interest bill.

Winners in the rapidly sinking rand include synthetic oil producer Sasol whose share price jumped 5,89 percent to R382,21 on Tuesday.

The JSE’s miners generally benefited from the weaker currency, led by African Rainbow Minerals, which gained 8,28 percent to R94.80.

The sale of Naspers’s 36,4 percent stake in Souq.com to Amazon.com helped its shares rise 3,11 percent to R2 305,49 on Tuesday.

Telkom — for reasons that are not clear since it is not a rand hedge — jumped 5,67 percent to R76,27 on Tuesday.

The funeral of struggle hero Ahmed Kathrada on Wednesday morning is likely to divert attention away from the unfolding drama in South African politics for a few hours.

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