Out to lunch?

Local financial markets were dominated by a strong rand, which continued to appreciate against a broadly weak US dollar.

The local unit rallied closer to the R6 level against the dollar on Thursday, but eased to close at R6,09 on Friday from R6,17 a week earlier.

Against the euro and the British pound, the rand strengthened to R7,53 and R11,27 respectively from R7,59 and R11,28.

Bonds were mixed, with the yield on the longer-dated R153 2010 falling to 9,63% from 9,67%, while that on the R194 2008 rose to 9,46% from 9,44% a week ago.

Money market rates were generally lower except for the yield on the 3-month NCD, which remained steady at 8,25%.

Yields on the 6-, 9- and 12-month NCDs eased to 8,45%, 8,65% and 9,00% respectively from 8,50%, 8,90% and 9,15%, while the 3-month jibar rose slightly to 8,113% from 8,106%.

A strong rally in commodity prices helped to contain the losses on local equities, with the FTSE/JSE all-share index closing only 0,1% lower at 10044,7 on Friday from the previous week’s close of 10053,5.

Industrials lost 1,3% to close at 8707,4, while financials were 0,7% down at 9785,1 from 9857,8. In contrast, resources gained 139,2points or 1,5% to close at 9411,5, while gold stocks rose by 0,5% to 1650,4 from 1642,9.

According to figures released by the South African Reserve Bank, gross gold and foreign exchange reserves increased by US$879million to US$11,4billion in June, while the net reserves level or the international liquidity position eased slightly by US$125million to US$7,890billion mainly as a result of a US$370million government loan that was settled in June.

Gross reserves were bolstered by the proceeds of the US$1 billion international bond issue settled on 2 June.