May 10, 2019 / 4:10 PM / 2 months ago

UPDATE 1-South African rand firms as ANC heads for re-election

(Adds stocks, updates levels, adds analyst quotes)

JOHANNESBURG, May 10 (Reuters) - South Africa’s rand strengthened more than 1% on Friday on expectations of political continuity, as the governing African National Congress (ANC) headed for a national election victory.

The ANC held a commanding lead with 94% of voting districts counted, according to the electoral commission’s website. It had secured 57.7% of the vote, with the main opposition Democratic Alliance (DA) on 20.6% and the leftist Economic Freedom Fighters (EFF) on 10.5%.

At 1545 GMT, the rand traded at 14.1900 per dollar, 1.08% firmer than Thursday’s New York close.

“The rand has already rallied a couple of percentage points from 14.45, with its strong run starting just before the vote and consolidating as the election outcome get clearer and more resilient to surprises,” said TS Securities in a note.

“Preliminary results indicate that (the) ANC has got close enough to allow further rand strength in the near future.”

Also powering the rand were hopes that the U.S. and China will find a middle ground in their trade dispute, said FXTM Research analyst, Lukman Otunuga in a note.

In fixed income, the yield on the benchmark bond due in 2026 was down 9 basis points at 8.460 percent.

Stocks also rose on the election news, tracking gains in other emerging markets too. The Johannesburg All-share index rose 0.5% to 56,780 points, while the Top-40 index firmed 0.54% to 50,533 points.

Leading blue-chip gainers were financial stocks, with Standard Bank up 4.08% and FirstRand up 3.72%. Absa Group and Nedbank climbed 3.43% and 3.13 percent respectively.

Reporting by Nqobile Dludla; editing by John Stonestreet

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