May 28 (Bloomberg) -- The rand rebounded from a fourth week of losses after opinion polls of Greek voters eased concern the country will exit the euro area, boosting commodity prices and South Africa’s export prospects. Bonds gained.
The currency gained as much as 1.5 percent and traded 1 percent stronger at 8.3243 per dollar as of 4:01 p.m. in Johannesburg. The rand fell 0.8 percent last week and has slipped 6.5 percent this month. The yield on the country’s 6.75 percent bonds due 2021 dropped one basis point, or 0.01 percentage point, to 7.66 percent.
Greece’s New Democracy, which supports the European Union’s bailout plan, was placed first in all six opinion polls published on May 26 as campaigning continued for next month’s general election. The 17-nation euro region is South Africa’s biggest regional trading partner, buying 22 percent of the country’s exports.
“Investors will probably start unwinding the risk trades that were driven by fears of a catastrophic event that would deal the euro zone a serious blow,” Quinten Bertenshaw, an analyst at Tradition Analytics in Johannesburg, said in e-mailed comments. “This would hint at the possibility of a rand recovery.”
The Standard & Poor’s GSCI Index of raw materials advanced for a second day as the prices of metals including copper and nickel and rose. South Africa has the world’s largest mineral reserves, according to Citigroup Inc. and raw materials account for 45 percent of the nation’s exports.
“With the euro on a slightly firmer footing and commodity prices also gaining, the rand is likely to regain some ground against the dollar in the short term,” Nomvuyo Guma, a currency strategist at Standard Bank Group Ltd. in Johannesburg, said in e-mailed comments. “With commodity currencies in particular having taken a beating against the dollar last week, there is room for a rebound today.”
Africa’s biggest economy grew 2.4 percent in the three months through March, from 3.2 percent the previous quarter, a report tomorrow may show, according to the median estimate of economists in a Bloomberg survey.
Emerging-market stocks rose for a third day and South Africa’ benchmark stock index gained, led by commodity exporters including Anglo American Plc and BHP Billiton Ltd.
The yield on South Africa’s $1 billion 5.875 percent bonds due 2022 dropped for the first time in five days, falling two basis points to 4.10 percent. The extra yield investors demand to hold the debt rather than U.S. Treasuries narrowed one basis points to 232 basis points.
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