For a fifth day, South Africa’s main stock index saw a steady rise and headed for a third consecutive record closing for the third consecutive year.
South Africa’s rand was the best-performing emerging-market currency against the dollar Friday, helping to drive gains in bank stocks. Banks say optimism over a global economic rebound fuelled appetite for riskier assets.
The FTSE/JSE Africa All Share Index advanced 1% as of 4:07 p.m. in Johannesburg, extending its gains this week to more than 7%, showing the best performance over the first five trading sessions of the year since 1999.
South African shares climbed to 68% from the pandemic-selloff low in March last year. The recent ascent has raised the 14-day relative strength index on the gauge to nearly 80 the highest since 2017.
Stockholders are piling into assets that win in an improving economic cycle, with ultra-loose monetary policies and hopes of more stimulus spending under U.S. President-elect Joe Biden adding fuel to these bets in a so-called reflation trade.
An index of local lenders surged 3.5%, adding to Thursday’s 3.1% increase. FirstRand Ltd. rose 4.5% and Standard Bank Group Ltd. added 3.9%, with the two stocks among the biggest drivers of the overall market strength.
Tech investor Naspers contributed the most index points to the benchmark Friday, rising 1.3% to reverse some of Thursday’s 2.8% slump.
Sasol Ltd. was top of the gainers, climbing 4.1% with Brent oil topping $55 a barrel for the first time since February as Saudi Arabia’s unilateral output cut eased over-supply fears. Sasol’s 25% New Year surge makes it the best-performing Johannesburg stock early in 2021.
Imperial Logistics Ltd. jumped as much as 10%, the most in seven months, benefiting from investors’ more upbeat outlook on the economy. Aspen Pharmacare Holdings Ltd. rallied for a fourth day, jumping as much as 5.4% to a four-month high.
The company has agreed to manufacture doses of Johnson & Johnson’s coronavirus vaccine candidate in South Africa if it gains regulatory approval. Gold stocks underperformed as demand for bullion as a haven waned. An index of miners of the precious metal retreated for a third day, falling 1.2%.