Banks Buoy S. Africa Stocks as Budget Hits ‘All the Right Notes’
(Bloomberg) -- South Africa’s main stock index extended its gains, spurred by Finance Minister Tito Mboweni’s budget address, climbing as much as 1.6% as banks rallied on a speech that Deutsche Bank AG described as “hitting all the right notes.”
The benchmark gauge posted its strongest advance for a month, with Standard Bank Group Ltd. climbing 2.7% and fellow lender FirstRand Ltd. rising 1.7% to be among the strongest drivers of the gains. So-called South Africa Inc. stocks focused on the domestic economy such as retailers also climbed as the rand strengthened.
“This should be positive for the rand and markets -- better-than-consensus deficit trajectory, thanks to an increase in tax collections of some 99 billion rand in FY20/21,” Johannesburg-based Deutsche Bank economist Danelee Masia wrote in a note. “The budget has been a welcomed surprise, and a positive deviation from previous years’ negative surprises.”
FTSE/JSE Africa All-Share Index was 1.2% higher as of 3:36 p.m. in Johannesburg, with 101 out of the 141 members of the gauge higher.
An index of banking stocks was 2.5% higher, after rising as much as 3.3%. Capitec Bank Holdings Ltd. rose 1.8%, Absa Group Ltd. gained 4.7%, Nedbank Group Ltd. rose 4.4% and Investec Plc 3.1%
Insurers climbed 3.1%, also boosted by the stronger local currency.
- Discovery Ltd. +5.3%, Sanlam Ltd. +2%, Old Mutual Ltd. +2.6%, Momentum Metropolitan Holdings +2.5%, Liberty Holdings Ltd. +3.3%
General retailers gained 3.2%, while food and drug retailers were up 1.4%.
- Woolworths Holdings Ltd. +4.4%, Foschini Group Ltd. +3.8%, Truworths International Ltd. +4.1%, Mr Price Group Ltd. +3.4%, Pepkor Holdings Ltd. +2.8%
- Shoprite Holdings Ltd. +3.5%, Clicks Group Ltd. +1.1%, Spar Group Ltd. +2.6%, Dis-Chem Pharmacies Ltd. +2.3%, Spar Group Ltd. +0.4%, Pick n Pay Stores Ltd. +2.9%
The gauge of mining stocks climbed 1.7%, as diversified miners joined gold and platinum producers in rising.
- Anglo American Plc +2.8%, BHP Group Plc +1.4%, Exxaro Resources Ltd. +3%, Glencore Plc +2.4%, African Rainbow Minerals Ltd. +1.2%
Platinum miners resumed their rally, climbing 1% as prices increased.
- Sibanye Stillwater Ltd. +1.7%, Impala Platinum Holdings Ltd. +0.6%, Northam Platinum Ltd. +2.2%, Royal Bafokeng Platinum Ltd. +4.1%
A gauge of gold miners climbed 1.1%.
- AngloGold Ashanti Ltd. +2.3%, Harmony Gold Mining Co. +0.1%, Pan African Resources Plc +0.3%
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