The JSE All Share index is up 6.7% on the week and the rand has strengthened, as investors read early local election results as a possible shift towards investor-friendly coalitions, according to market commentary on Friday.
This follows our earlier reports that the rand was firmer near R16.40 on Thursday and held near R16.60 earlier in the week.
What the market is doing
The commentary puts the rand at about R16.52 to the dollar on Friday. It reports that the benchmark 2035 government bond yield fell 13.5 basis points to 8.33% in early trade on Thursday. A developing-markets stock index fell 1.3% over the same period, according to the report.
ETM Analytics said in a research note that markets were reading early results as "a potential shift towards investor-friendly coalitions in major economic centres".
Trade and the rate decision
Terry Gale, chairperson of Exporters Western Cape, said the outcome of the United States midterm elections has opened a fresh opportunity to avert South Africa's exclusion from the African Growth and Opportunity Act, according to the report. The United States has said South Africa's access ends on 1 January 2027, a decision Pretoria disputes.
The Reserve Bank's Monetary Policy Committee is scheduled to announce its next interest rate decision on 19 November, according to the Bank's website.
What we do not yet know
- The size of any foreign inflows, which the commentary describes in its headline but does not quantify.
- Whether the moves will hold once coalition outcomes are known.
