The Tito factor

(27.7.04) The rand lost some ground against major currencies on the broad-based US dollar recovery.

Speculation on whether central bank governor, Tito Mboweni would serve a second term when his contract expires in early August, as well as official concerns over the rand’s strength raised by Minister of Finance Trevor Manuel pushed the rand lower on Friday.

The local unit weakened to R6,19 against the dollar from the previous week’s close of R5,97. Against the euro and the British pound, the rand was lower at R7,54 and R11,41 respectively from R7,45 and R11,18.

Bond prices also weakened in line with the rand, with yields on the R153 2010 and the R194 2008 rising to 9,78% and 9,58%, from 9,60% and 9,38%. However late on Friday, the government announced that Tito Mboweni will serve a second term lasting another five years.

Positive growth in financials and industrials helped the overall equity index to post a small gain in a week dominated by a relatively strong rand and sluggish global markets.

The FTSE/JSE all-share index managed to close 0,5% higher at 10 063,8 on Friday, up 45,7 points from the previous week’s close of 10 018,1. The resources index was a touch softer at 9 344,7 from 9 346,6, while gold stocks fell by 0,8% to 1 555,2 from 1 567,4.

Industrials and financials ended the week in positive territory, gaining 0,5% and 1,1% respectively to close at 8 760 and 9 880,1 respectively.