January 25, 2018 / 4:27 PM / 9 months ago

UPDATE 1-Rand assets steady as Ramaphosa talks up South Africa in Davos

(Updates to reflect afternoon trade)

JOHANNESBURG, Jan 25 (Reuters) - South African assets were little changed on Thursday, with the rand strengthening slightly as the leader of the ruling African National Congress talked up the prospects for foreign investment at the World Economic Forum in Davos.

At 1606 GMT, the rand was 0.08 percent stronger against the dollar at 11.8400, after hitting a new 2 1/2-year high earlier in the day.

The currency has surged since Deputy President Cyril Ramaphosa won the race to succeed Jacob Zuma as ANC leader last month, putting him in pole position to become the country’s next president.

“The market is betting on a fresh start in South African politics,” Commerzbank analysts said in a research note.

Ramaphosa, who has promised to fight corruption and boost economic growth, told a news conference in Davos that investors had warmed to the changes that the South African delegation had highlighted in the country.

“We go back home also with a bag full of investment commitments. Many of the business leaders that I have met here have said they are buoyed by this new mood,” Ramaphosa said.

On the equities market, rand-hedge shares weighed on gains from the banking and financial sector.

The benchmark Top-40 index dipped 0.03 percent to 54,558 points while the All-Share index ticked up 0.1 percent to 61,685 points.

British American Tobacco fell 2.59 percent to 829.74 rand, and bourse heavyweight Naspers dropped 1.41 percent to 3648.00 rand.

Further losses were curbed by risk-on sentiment in the banking sector, which rose 2.1 percent, and the financial sector, which lifted 1.16 percent.

Cratos Capital equities trader Greg Davies said: “Overseas investors are a little underweight in South Africa, and the first place they start buying is banks, financial and industrials.”

Government bonds were broadly flat, with the yield on the 2026 benchmark instrument up one basis point to 8.435 percent.

Reporting by Alexander Winning and Tanisha Heiberg in Johannesburg and Alexis Akwagyiram in Davos, Editing by William Maclean

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