(Updates to reflect afternoon trading)
JOHANNESBURG, Dec 4 (Reuters) - South Africa’s rand strengthened on Monday on hopes that Deputy President Cyril Ramaphosa will win the race to become the next leader of the ruling African National Congress (ANC) at a party conference in less than two weeks’ time.
The race to succeed President Jacob Zuma as ANC leader is being closely watched by traders as it will determine the future policy trajectory for the South African economy, which is grappling with credit rating downgrades and weak growth.
Ramaphosa is seen as more business-friendly than his main rival in the leadership contest, former cabinet minister Nkosazana Dlamini-Zuma, who was previously married to Zuma.
At 1630 GMT, the rand was up 1.4 percent at 13.5575 to the dollar after Ramaphosa won the most nominations for party leader in Limpopo province.
“The good news coming through that Cyril Ramaphosa is getting a lot more support is possibly giving the rand a bit of an injection. Obviously markets view it as positive, but it is still a long way (to the conference),” said TreasuryOne currency dealer Phillip Pearce.
Ramaphosa has more nominations for party leader than Dlamini-Zuma after eight of nine provinces revealed their nominations. But the largest province - KwaZulu-Natal - is yet to announce how its members voted and is expected to favour Dlamini-Zuma.
On the stock exchange, the benchmark Top-40 index rose 0.27 percent to 59,607 points, while the All-Share index advanced 0.36 percent to 53,077 points. Bourse heavyweight Naspers led the gainers, rising 2.78 percent to 3,629.97 rand after Deutsche Bank raised its target price.
Further gains were curbed by gold shares, which weakened on the back of bullion prices falling back towards four-week lows hit last week.
Sibanye fell 4.84 percent to 17.90 rand, Gold Fields slid 2.50 percent to 56.19 rand and AngloGold Ashanti fell 3.59 percent to 134.56 rand.
The yield on South Africa’s benchmark government bond due in 2026 was 2 basis points lower, reflecting marginally stronger overall bond prices.
Reporting by Alexander Winning, Olivia Kumwenda-Mtambo and Tanisha Heiberg; Editing by Kevin Liffey