Rand tests R12.90/$ as traders bet on Ramaphosa win

Cape Town - The market, which is keenly watching the ANC elective conference, is pricing in a win for Cyril Ramaphosa as next party leader, with the rand already testing levels under R12.90 against the US dollar.

"The liquidity is still very thin and the pricing is wide, but it could be an interesting day tomorrow," TreasuryOne currency dealer Wichard Cilliers told Fin24 on Sunday night.

By 22:24 the rand was trading at R12.90 against the greenback as Australia and New Zealand came online. It later slipped back to R12.93/$.

"The market is pricing in a Cyril win currently, with USDZAR already testing levels of R12.75, EURZAR at R15.00 and GBPZAR at R17.00.

"The risk is if Nkosazana Dlamini-Zuma wins, we can easily see the ZAR test back above R14.00. For now we will need to watch for the result tomorrow morning," he said.

Cilliers was commenting on the news that Deputy President Ramaphosa and former African Union chair and ANC MP Nkosazana Dlamini-Zuma have been confirmed as the last contenders standing for the top job.

Ramaphosa was nominated by five provinces and Dlamini-Zuma by the remaining four. The other five candidates received no nominations from the conference floor.

The last time the rand traded around these levels was in September before it lost ground. In March, just before former finance minister Pravin Gordhan and his deputy Mcebisi Jonas were axed by President Jacob Zuma in a Cabinet reshuffle, the unit was trading as low as R12.30 to the dollar.

“The market is getting a little ahead of itself,” Guy Algeo, executive director at Prodigy Asset Management, told Bloomberg by phone. “It’s not a done deal.”

Bookies meanwhile also penciled Ramaphosa in as favourite to take the top ANC post.

The online betting website sportingbet.co.za was on Saturday offering odds of 1.75 if Ramaphosa managed to clinch the top spot.

This means that if someone bet R100 on the deputy president, they’ll receive R175 from the bookies should he win during a vote at the ANC’s 54th national conference at Nasrec in Johannesburg.

Dlamini-Zuma had higher odds of 3.2 for those wanting to take a greater risk with their money.

Other bookies had different numbers, but all that Fin24 found had Ramaphosa as the odds-on favourite.

The site bet.co.za had Dlamini-Zuma at 2, meaning you will double your money if she wins.

For now, we'll have to wait and see - the election results are expected to be announced on Monday.

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