June 13, 2017 / 4:45 PM / 7 months ago

South Africa's rand stretches gains, Naspers pulls bourse higher

JOHANNESBURG (Reuters) - South Africa’s rand extended its recent recovery on Friday as political uncertainty eased and local economic fundamentals came back in focus, highlighting the currency’s high return value as investors’ search for high yields continued.

A market heavyweight, e-commerce and Pay-TV group Naspers, led the bourse higher after posting a 41 percent profit jump.

At 1500 GMT the rand was trading 0.5 percent firmer at 12.9200 per dollar, benefiting from a dip in the dollar following weak factory and services data that reignited doubts about U.S. economic growth for the rest of 2017.

The rand has firmed nearly 1.5 percent since South Africa’s top court ruled on Thursday that secret ballots may be held for motions of no confidence in parliament, a potential threat to the tenure of the beleaguered president, Jacob Zuma.

Data early in the week showing that inflation remained subdued and the current account deficit had grown slightly boosted sentiment, but that was reversed by a spat over the independence of the central bank, which dragged the rand to a three-week low.

Economists said consumer price, credit, employment and trade data due next week could further support optimistic views of the South African economy’s ability to bounce back from recession.

Bonds were firmer, with the yield on the benchmark paper due in 2026 down 3 basis points to 8.53 percent.

A strategist at Standard Bank Warrick Butler said he expected local paper, along with Turkish and Mexican bonds, to come back into favour “sooner rather than later, especially as U.S. Treasuries have not pushed higher despite some bullishness”.

On the equities market, the benchmark Top-40 index was up 0.92 percent at 45,358 points and the broader All-share index rose 0.84 percent to reach 51,503 points.

Naspers, Africa’s biggest listed company by market value, reported a 41 percent jump in annual profit as strong results from its Chinese money spinner Tencent offset weak performances from its pay-TV and other e-commerce ventures.

“We were expecting an increase in earnings of 37 percent so they were slightly better than expected ... it’s a major component of the All Share index so when it moves in a meaningful direction, then you see the rest of the market move as well,” said Independent Securities trader Ryan Woods.

Shares in Naspers rose 2.60 percent to 2,638.61 rand.

The platinum index climbed 1.03 percent on higher platinum prices.

Reporting by Olwethu Boso and Mfuneko Toyana; Editing by Kevin Liffey

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