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South Africa's rand surges after speaker allows secret ballot in Zuma vote

Aug 08, 2017

South Africa's assets gained on Monday with the rand surging as much as 1.7 percent in part because a parliamentary speaker allowed a secret ballot in Tuesday's vote of no-confidence against President Jacob Zuma.

The prospect of a secret ballot raises the chances of the departure of Zuma, which traders see as a net positive for the rand.

At 1502, the rand firmed 1.17 percent to 13.2625 per dollar, giving up some of the gains after strengthening to 13.1825 shortly after National Assembly speaker Baleka Mbete announced the decision.

The decision could embolden members of the ruling African National Congress (ANC) to vote against Zuma and puts him in a precarious position as he struggles to fend off opposition accusations of corruption and mismanaging the economy.

"I still think the vote will fail, there is maybe a 30 percent chance of success, but it won't be truly secret and there will be intense pressure on MPs. Ultimately a secret ballot wouldn't have been offered unless Zuma was

confident of wining," said Nomura emerging markets economist Peter Attard Montalto.

On the bourse, banking stocks rose, extending gains after news that critics hoped would paved way to oust Zuma - who is widely blamed for South Africa's loss of highly prized investment grade sovereign credit rating.

The banking index rose 1.1 percent, outpacing a 0.5 percent in the blue-chip Top-40 index, with Barclays Africa up 1.8 percent at 149.17 rand and rival Nedbank rising 1.7 percent to 229.71 rand.

In fixed income, the yield for the benchmark government bond due in 2026 was down 5 basis points at 8.570 percent.

Reporting by Tiisetso Motsoeneng; Editing by Matthew Mpoke Bigg (Reuters)

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