JOHANNESBURG (Reuters) -The South African rand firmed on Monday on signs the Omicron coronavirus variant driving a fourth wave of COVID-19 infections in the country may be causing mainly mild infections.
At 1500 GMT, the rand traded at 15.9025 against the dollar, 1.04% firmer than its previous close.
Anecdotal accounts from South African doctors and experts suggest that Omicron may be causing less severe clinical symptoms than other coronavirus variants, though they caution that more research is needed before definitive conclusions can be drawn.
The rand sold off late last month after the variant was first detected in southern Africa, prompting countries including Britain and the United States to impose travel restrictions on the region for fear Omicron could spread quickly even among vaccinated people.
Analysts at ETM Analytics said in a note that the rand was likely to recover as fears over Omicron gradually ease, but they said the extent of the recovery could depend on market expectations for U.S. Federal Reserve monetary policy tightening.
The government’s benchmark 2030 bond firmed alongside the currency, with the yield falling 12.5 basis points to 9.475%.
On the Johannesburg Stock Exchange, Thungela Resources topped the bourse after the thermal coal miner said it is likely to return to profitability in respect of headline earnings per share for the 2021 financial year.
Thungela also said it may declare additional returns to shareholders above the targeted minimum pay-out ratio of 30% of adjusted operating free cash flow.
Thungela, a new spin-off from Anglo American, jumped 15.01% to 80.99 rand, a near two-month high.
“No guidance has yet been given for 2022, but we are far more confident that production/sales will be closer to the mine capacity of about 16-17 million tonnes, with even the possibility of some destocking of the 1.2 million tonnes of coal that built up this year,” equity analysts at investment bank Liberum said in a note.
Lender Nedbank Group was the number three gainer, up 3.30% to 173 rand after it said its full-year profits would almost double as performance across all industry segments has reached pre-pandemic levels.
Overall the Johannesburg All-Share closed 0.3% firmer, with the Top-40 index up 0.45%.
(Reporting by Alexander Winning and Nqobile Dludla; editing by Jason Neely and Mark Heinrich)
