May 4, 2018 / 3:39 PM / 3 months ago

UPDATE 1-South African rand steadies amid dollar strength, stocks rise

(Updates rand, bonds, stocks levels)

JOHANNESBURG, May 4 (Reuters) - South Africa’s rand steadied against the dollar on Friday, failing to build on gains in the previous session, while stocks rose as bourse heavyweight Naspers recovered ground.

At 1515 GMT the rand was trading at 12.5800 per dollar, not far off its close of 12.5875 on Thursday. However, it was on track for a 2 percent decline over the week.

It was amongst the worst performing emerging market currencies in April and remains on the back foot in May with the dollar lifted by rising U.S. Treasury yields to its highest levels this year against a basket of currencies, despite disappointing U.S. employment data for April.

“We need to ask ourselves whether the renewed strength of the greenback is just a clearing out of stale short positions or whether it is a fundamental shift in the trajectory of the U.S. dollar,” Rand Merchant Bank analyst Michelle Wohlberg said.

South African government bonds weakened, with the yield on the benchmark due in 2026 up 1.5 basis points to 8.345 percent.

On the bourse, the benchmark Top-40 index rose 0.92 percent to 50,408 points, while the All-Share index gained 0.65 percent to 57,273 points.

Naspers closed 4.88 percent higher at 3019.33 rand, after dropping more than 4 percent on Thursday following a fall in China’s Tencent Holdings, in which it is a major shareholder.

Gold and platinum miners, however, were under pressure following weaker precious metal prices, with the gold mining index falling 2.72 percent.

“The strong U.S. dollar and mixed economic data kept the pressure on emerging stocks. Mining and industrial shares posted the heaviest losses this week.” NKC African Economic said.

The biggest faller was Dis-Chem Pharmacies, dropping 13.86 percent to 30.40 rand after its full-year earnings came in below market expectations.. (Reporting by Olivia Kumwenda-Mtambo and Nomvelo Chalumbira Editing by Alexander Smith)

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