S. Africa Stocks at Three-Month High as Vaccine News Spurs Rally

(Bloomberg) -- South Africa's main stock gauge extends gains on Monday, rising as much as 2.8% to the highest since Aug. 6, after progress in the development of a coronavirus vaccine sparked a rally across financial markets.

NOTE: Pfizer's Covid Vaccine Prevents 90% of Infections in Study

“The announcement of a highly effective vaccine removes some of the long-held concerns that the economic disruption caused by the Covid-19 pandemic would persist indefinitely,” says Lester Davids, an investment strategist at Sharenet Securities. “On this basis, we are seeing mass buying across most risk assets, in both developed and emerging markets.”

The gains come as markets cheer the “certainty around the U.S. presidential election” after Joe Biden's win, Davids says. Some investors speculate that Biden's victory could deliver a better trade relationship with U.S.-China and another economic stimulus package could be in store.

“To a certain extent it may also be driven by some short covering by market participants who may have anticipated that the outcome of the election would lead to selling pressure,” Davids says.

• The dollar weakened as investors dumped haven assets after Pfizer's announcement, driving the rand up 2.5%. Rand gains lift the index for bank stocks up 8.9 to a five-month high
  • FirstRand Ltd. +13%, Standard Bank Group Ltd. +7.7%, Absa Group Ltd. +7.7%, Nedbank Group Ltd. +6.1, Investec Plc +10%, Capitec Bank Holdings Ltd. +5.1%
• Food and drug sellers +7.3%, while general retailers up 3%
  • Shoprite Holdings Ltd. +10%, Clicks Group Ltd. +5%, Spar Group Ltd. +5%, Bid Corp Ltd. +9%, Pick n Pay Stores Ltd. +4.1%, Dis-Chem Pharmacies Ltd. +3.1%
  • Mr Price Group Ltd. +3.9%, Woolworths Holdings Ltd. +3.6%, Foschini Group Ltd. +2%, Truworths International Ltd. +5%, Massmart Holdings Ltd. +6.5%, Motus Holdings Ltd. +3.4%, Pepkor Holdings Ltd. +1.8%
  • Gold stocks drag the index for mining stocks down 0.2%, as Pfizer's announcement saw investors piling into risk assets and dumping havens.
    • Sub-index for gold stocks down 9.5%, as billion falls 2.4%
      • Gold Fields Ltd. -12%, AngloGold Ashanti Ltd. -7.2%,
      • Harmony Gold Mining Co. -11% after company publishes production data for the three months to September
      • Platinum companies fall 3.8%
        • Sibanye -7.4%, Impala -2.5%, Northam -3.5%, Royal Bafokeng -1.8%

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