South African markets rise as banking crisis settles, rand weakens
Business
South African markets rise as banking crisis settles, rand weakens
JOHANNESBURG (Reuters) - South African stocks rose on Monday on easing worries about banking system health in several developed markets, while the rand slipped.
U.S. regulators said on Monday they would support a deal for First Citizens BancShares (FCNCA.O) to acquire failed Silicon Valley Bank (SVB), raising hopes that a possible global banking crisis has been averted.
The collapse of SVB in early March stoked fears of an impending industry crisis, wiping out billions of dollars in the value of banks globally. South African banks, which averted the 2008 financial crisis, lost almost a tenth of their value after the SVB saga.
South African banks are conservative and well capitalised, said Rand Swiss Portfolio Manager Gary Booysen. "Fears around systemic collapse and banking contagion should be limited for local banks as they continue to benefit from higher interest rates."
Banking stocks (.JBANK), which closed up 1.67%, boosted the Johannesburg Stock Exchange with the blue-chip Top 40 index (.JTOPI) rising 0.98% and the broader all-share index (.JALSH) gaining 0.9%.
At 1516 GMT, the rand traded at 18.3250 against the dollar, 0.92% below its previous close.
The dollar remains weaker after last week's U.S. Federal Bank meeting where interest rates were raised 25 basis points (bps), analysts said.
The South African Reserve Bank (SARB) will announce its rate decision on Thursday, with markets expecting a 25 bps hike.
The government's benchmark 2030 bond was slightly stronger, with the yield down 1 basis point at 9.925%.
