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South Africa's bourse to review trades around Gordhan's recall - BusinessDay
April 10, 2017 / 9:04 AM / 5 months ago

South Africa's bourse to review trades around Gordhan's recall - BusinessDay

JOHANNESBURG, April 10 (Reuters) - South Africa’s bourse will investigate an increase in the trading of certain securities in the hours before former finance minister Pravin Gordhan was recalled from an international investor roadshow, BusinessDay newspaper reported on Monday.

On March 27, news broke that President Jacob Zuma had ordered Gordhan to return immediately from a trip to Britain and the United States. Gordhan was later dismissed in a cabinet reshuffle.

The newspaper reported that the Johannesburg Securities Exchange was examining trading in securities that were affected by news of the recall.

Officials at the exchange would not initially confirm or deny the report when contacted by Reuters.

The report said that the exchange would seek to identify activity that might warrant further investigation by the Financial Services Board’s market abuse department.

“The news precipitated material moves in the value of numerous listed securities including currency futures,” the exchange’s director of market regulation Shaun Davies is quoted as saying by the paper.

Davies declined to say which securities were being investigated, but it is likely that banking stocks will be among them, the BusinessDay said.

The rand weakened by about 2.5 percent ahead of the news, according to Thomson Reuters data, falling further after the recall was confirmed.

Speculation of large bets on currency futures at around the same time also surfaced, causing market watchers to speculate the currency was being “shorted”, local media reported.

Short-selling refers to the selling of instruments that have been borrowed, in anticipation of a fall in prices. (Reporting by Mfuneko Toyana; Editing by James Macharia)

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