Miners Lead Biggest Gain in South African Stocks in Two Weeksby
All share index heads for best quarterly gain since March 2015
Mining stocks benefitting from dollar weakness: Vunani
Mining stocks led a rally in South African shares, with the benchmark index advancing the most in more than two weeks, as some investors bet that a weaker dollar will prove positive for commodity prices.
The FTSE/JSE Africa All Share Index gained for the first time in five days, ending the longest losing streak since Feb. 11. The gauge added 1.4 percent, the most since March 14, rising to 52,495.46 by the close in Johannesburg. The quarterly gain is 3.6 percent, the largest since March 2015.
The dollar headed for its worst month in more than five years after Federal Reserve Chair Janet Yellen doused speculation the U.S. central bank would pick up the pace of interest-rate increases. Diversified mining company African Rainbow Minerals Ltd. and Kumba Iron Ore Ltd. advanced 13 percent, while Lonmin Plc and Anglo American Plc climbed 8.5 percent.
“They are reacting to the fact that a weaker dollar is good for commodity prices, that’s why those are rallying, but it is counter-intuitive because the rand is moving the opposite direction for them,” Rob Pietropaolo, a trader at Vunani Private Clients in Johannesburg, said by phone.
The South African rand strengthened for a second day to trade below 15 per dollar for the first time this year. The currency was 2 percent firmer at 14.8672 by 5:08 p.m. in Johannesburg.
“The All Share has staged remarkable recovery after the global rout which marked the worst January for global markets in recorded history,” Pietropaolo said. “Looking ahead, I would expect the index to find some support near the psychological 50,000 level.”