Rand skyrockets on strong early results from Covid-19 vaccine trials

(Getty)
(Getty)

SA's main stock gauge on Monday rose for the sixth day running, up as much as 2.8% by the late afternoon in a major show of investor optimism following pharmaceutical company Pfizer's announcement that early data from its coronavirus vaccine trials had suggested a high degree of effectiveness. 

The rand, meanwhile, strengthened to its highest level since early March, before the pandemic hit SA shores.

Optimistic outlook

Earlier in the day - prior to news of the promising vaccine trial - Bloomberg had already reported the FTSE/JSE Africa All Shares Index had climbed to its highest intraday level since late August, which analysts attributed to the outlook under a Joe Biden US presidency. 

FNB Wealth & Investments portfolio manager Wayne McCurrie said while there was still some time until rollout of a vaccine, the news was "all the market needs". 

"The time taken to rollout is almost irrelevant," he commented. 

Among those who saw notable gains on the day were Sasol, up over 19%, with brent crude oil gaining 8.6% to trade at $42.80 per barrel; Firstrand, up over 12%; as well as telecommunications company MTN, which saw a gain of over 9%. 

The rand, meanwhile, has continued strengthening. By 16:40pm Johannesburg time, the local currency was trading up over 2% at R15.26/$.

"News in from Pfizer of a vaccine for Covid-19 virus, that protects you 90% against the virus. The USD is under pressure from this news and the ZAR is currently trading at 15.2900 against the dollar.

"We see that all emerging markets are strengthening against the dollar," said Andre Botha, senior currency dealer at TreasuryONE.

Additional reporting by Bloomberg.


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