Rand rallies after Gordhan says he won't quit

Johannesburg - The rand rallied against the dollar on Friday after Finance Minister Pravin Gordhan described fraud charges against him as frivolous and said he intended to continue in his job.

Stocks rose, led by heavyweight Naspers - Africa's biggest listed company - which gained on news of plans to sell assets to repay debt and fund new acquisitions.

Investors have been worried that Gordhan, a market favourite, could be removed from his job over the charges, impeding efforts to revive economic growth and raising the risk of a sovereign credit rating downgrade to junk status.

The rand hit a session high of 14.0825 per dollar, up more than 1.1% from Thursday's close, after Gordhan told a Thomson Reuters conference that he would carry on with his job, including delivering a medium-term budget on October 26.

The rand traded at 14.2000 at 15:21 GMT, up 0.35%, holding its ground after Gordhan's lawyers said it would be pointless to take up an invitation from prosecutors to seek a review of charges against him.

The rand plunged nearly 4% on Tuesday, when prosecutors ordered Gordhan to appear in court on November 2 to answer charges that he cost the tax department R1.1m by approving early retirement for a deputy commissioner in 2010 and re-hiring him as a consultant.

Traders said markets would remain tense in the run-up to Gordhan's court appearance. "Political noise continues to dictate movement in local financial markets," Standard Bank trader Oliver Alwar said.

Government bonds gained alongside the rand, with the yield on the benchmark due in 2026 slipping 9.5 basis points to 8.81%.

On the bourse, the benchmark Top-40 index climbed 1.48% to 44 658 points while the All-Share index rose 1.29% to 51 146 points.

Naspers Ltd gained 4.70% to R2294.99 following news that it would sell its Polish e-commerce business Allegro for $3.25bn.

"It was just looking for a bit of a bounce, possibly a little bit overdone," said BP Bernstein trader Vasili Tirasis.

Naspers had fallen more than 4% in the previous session.

Steinhoff International rose 2.46% to R74.61 following plans to buy Australian retailer Fantastic Holdings for 361 million Australian dollars ($274m).

Read Fin24's top stories trending on Twitter:

ZAR/USD
16.92
(+1.33)
ZAR/GBP
21.36
(+0.76)
ZAR/EUR
19.18
(+0.84)
ZAR/AUD
11.82
(+0.73)
ZAR/JPY
0.16
(+1.03)
Gold
1808.26
(+0.80)
Silver
18.73
(+2.61)
Platinum
848.00
(+1.37)
Brent Crude
42.97
(-0.05)
Palladium
1925.00
(+0.44)
All Share
55870.69
(+1.13)
Top 40
51558.75
(+1.25)
Financial 15
10275.29
(+1.87)
Industrial 25
77503.35
(+0.84)
Resource 10
52793.47
(+1.49)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
I'm not really directly affected
18% - 1787 votes
I am taking a hit, but should be able to recover in the next year
23% - 2342 votes
My finances have been devastated
35% - 3506 votes
It's still too early to know what the full effect will be
25% - 2521 votes
Vote