* Rand boosted by Fitch decision to keep credit rating
* Stocks lower with Barclays Africa in the spotlight
(Adds latest prices, analyst quotes)
JOHANNESBURG, June 1 South Africa's rand rose to
its firmest in three sessions on Thursday after Fitch kept its
credit rating unchanged at one notch below investment, while
increased pressure on President Jacob Zuma also lifted the
currency and bonds.
Stocks ended lower although Barclays Africa rose more than 3
percent after its British parent sold more than third of the
lender in an oversubscribed rapid share sale.
At 1500 GMT, the rand traded 1 percent firmer at
12.9550 per dollar, having earlier reached a session best of
12.9400 after Fitch affirmed the country's sub-investment grade
rating with a stable outlook.
The smallest of the big three rating firms warned that weak
economic growth remained a key risk, along with funding to prop
up state firms and in-fighting between competing factions in the
ANC ahead of the party's elective conference in December.
Fitch downgraded South Africa to BB+ from BBB- on both
foreign and local currency debt in early April after a cabinet
reshuffle that saw respected finance minister Pravin Gordhan
S&P Global Ratings, which also cut its foreign debt rating
to "junk" status in April, is due to announce an update on
"There's a little more anxiety about S&P's because they have
a negative outlook and the local currency rating is still
investment grade," said co-head of fixed income at Investec
Traders said the rand is likely to find forward support in
the latest bout of pressure facing Zuma, after leaked documents
alleged improper dealings in government contracts by Zuma's
"Rand and bond markets are already pricing in Zuma leaving
office before his term ends in 2019. It's unlike in Brazil,
investors here are betting on the strength of South Africa's
institutions," said senior economist at Nedbank Isaac Matshego.
Bonds also firmed, with the yield on the benchmark
government paper due in 2026 cutting 5.5 basis points to 8.545
In stocks, the broader All-share index was down
1.35 percent at 52,840 and the benchmark Top-40 index lost 1.4
percent to 46,487.
Barclays PLC cut its stake in regional unit to 15 percent
sooner than expected in what some analysts said was sign that
there was no shortage of buyers of Barclays Africa stock.
In reaction, shares in the pan-African lender climbed 3.3
percent to 143.56 rand.
"Investors recognise that banks are profitable machines, and
are willing to take a longer dated view, perhaps beyond the next
five years," said Sasha Naryshkine, a fund manager at Vestact in
On the downside, MTN Group lost 1.2 percent to
116.25 rand after Turkey's Turkcell said its $4.2 billion claim
against the mobile phone would be heard in a South African
(Reporting by Mfuneko Toyana and Tiisetso Motsoeneng; Editing
by Joe Brock)