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Rand Gains Third Day as Ramaphosa Win Boosts Investor Confidence

Dec. 18 (Bloomberg) -- The rand advanced for a third day after businessman Cyril Ramaphosa was elected deputy president of South Africa’s ruling African National Congress, boosting expectations of more investor-friendly policies.

The currency gained as much as 0.2 percent and traded 0.1 percent stronger at 8.5316 per dollar by 4:56 p.m. in Johannesburg after weakening 0.3 percent earlier. Yields on benchmark 10.5 percent bonds due December 2026 fell four basis points, or 0.04 percentage point, to 7.32 percent.

Ramaphosa defeated ANC Treasurer Mathews Phosa and Human Settlements Minister Tokyo Sexwale for the post. His win may improve investor sentiment toward South Africa, according to independent analyst Ian Cruickshanks. President Jacob Zuma retained his position by beating his deputy, Kgalema Motlanthe. Separately, Minister Trevor Manuel said he would remain head of the country’s Planning Commission, even after stepping down from the ANC’s National Executive Committee.

Ramaphosa’s election to the second-highest position in the party signalled an “improving political landscape,” Cruickshanks said by phone from Johannesburg today. “He probably understands that the private sector is best run by business. It’s not about public sector intervention.”

The appointment of Ramaphosa, 60, the chairman of MTN Group Ltd., Africa’s biggest mobile-phone company, to a top party post may benefit Zuma most as he struggles to restore investor confidence in an economy hit by a wave of violent strikes.

‘Positive Twist’

“The fact that Zuma has been reappointed is no real surprise; people are a lot more happy about Ramaphosa being appointed,” Warrick Butler, head of rand trading at Johannesburg- based Standard Bank Group Ltd., said by telephone. “Manuel is still on the national planning committee; Ramaphosa is the deputy on that committee. That’s put a slight positive twist on the ANC conference.”

Bonds also benefited from speculation the pro-stimulus Liberal Democratic Party’s victory in weekend elections in Japan would lead to increased monetary stimulus and purchases of high-yielding assets including South African debt, Sean McCalgan, an analyst at Johannesburg-based ETM said by phone. South African markets were closed yesterday for a public holiday.

To contact the reporter on this story: Stephen Gunnion in Johannesburg at sgunnion@bloomberg.net

To contact the editor responsible for this story: Vernon Wessels at vwessels@bloomberg.net

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