Follow us on:

The rand strenghtens

By Faeza
15 December 2015

The rand strengthened below the key R15/$-mark on Tuesday after plunging to all-time lows against all major currencies following a cabinet reshuffle that saw Finance Minister Nhlanhla Nene relegated to serve at the Brics Development Bank.

On Tuesday the rand traded as low as R14.94 from Monday's close of R15.10 and the record low of R16.05 reached amid the Nene saga.

The 17 financial and bank heavyweights in the JSE’s Top 40 index lost a massive R289bn off their combined market capitalisation from where they closed before Nene's axing on Wednesday night. However, the index regained R118bn on Monday following a second cabinet reshuffle which saw Pravin Gordhan, Nene's former boss, reinstated in his old position.

The market rout started when Zuma removed Nene from his post on Wednesday evening after 19 months, without giving any reasons except to say that he would be switched to another key role. His replacement was David van Rooyen, a lawmaker several analysts said they had never heard of.

Van Rooyen, who had been finance minister for only four tumultuous days, has swapped roles with Gordhan as Minister of Cooperative Governance and Traditional Affairs.

But calm has largely returned to the markets after Sunday night's surprise announcement of Gordhan's return to the National Treasury.

By 11:40 the JSE All-share index was up 0.57% to 48 357 points, the JSE Top 40 gained 0.54% to 43 648 and the hard-hit Financial index rose 1.3% to 14 423 points.

Source: https://news24wire.com/browse/feeds#source-news24wire|Digital|a198b51a-c378-4329-9374-36b064fa59e8