JOHANNESBURG – The rand recovered on Wednesday after the state prosecutor said Finance Minister Pravin Gordhan could ask for a review of a decision to charge him with fraud.
Stocks fell in line with most emerging assets as continued political uncertainty marred investor confidence.
At 1508 GMT, the rand traded at 14.2200 per dollar, one percent firmer from its New York close on Tuesday. Earlier in the day the unit had firmed more than two percent to 14.0025/dollar.
The rand plunged nearly four percent on Tuesday after the National Prosecuting Authority (NPA) said Gordhan had been summoned to court on 2 November to hear fraud charges against him.
Prosecutor Shaun Abrahams said Gordhan cost the South African Revenue Service R1.1 million by approving early retirement for a deputy commissioner in 2010 and re-hiring him as a consultant.
Abrahams said on Wednesday Gordhan can apply for a review of the charges.
“The market reacted positively to this. Already yesterday there was some sceptism whether these claims will stick and we are seeing possibly the NPA backtracking on this decision to push ahead with attempts to prosecute the finance minister,” ETM Analytics market analyst Jana van Deventer said.
Stocks fell amid economic and political uncertainty, despite banks reversing previous losses following the state prosecutor’s confirmation that Gordhan could ask for a review.
“It’s brought a lot of uncertainty which the market doesn’t like,” said Cratos Capital equities trader Greg Davies.
Among the biggest blue-chip fallers were Impala Platinum which shed 2.45 percent to R60.48, BHP Billiton Plc which dropped 2.15 percent to R214.38 and Intu properties plc which fell 2.13 percent to R48.66.
Curbing further losses Nedbank Group Limited rose 0.96 percent to R218.70, FirstRand Limited gained 0.42 percent to R45.53 and Standard Bank Group Limited rose 0.31 percent to R140.43.
On the bond market, in fixed income the yield for the benchmark government instrument due in 2026 dipped four basis points to 8.89 percent.