Banks Buoy S. Africa Stocks as Budget Hits ‘All the Right Notes’

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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