SARAH BULLEN, Cape Town | Wednesday 5.00pm
LOCAL markets responded positively to the Budget on Wednesday, with a strong boost for the currency coming in Finance Minister Trevor Manuel’s conservative approach to raising offshore asset swap limits.
By 4.320pm the rand was under R6,30 to the dollar. Barnard Jacob Mellett dealer Kevin Brady said that investors were relieved that Manuel made no dramatic move in hiking the offshore asset swap allocations.
Manuel decided to retain the current asset swap dispensation, but to change the definition of the 15% limit from total assets employed in South Africa, to 15% of total assets. Unit trusts would be permitted to invest up to 20% of their total assets under management by way of asset swaps.
Bonds also reacted positively to the Budget, with the R150 moving to a day’s high of 12,90% in the afternoon after hitting a low of 13,16% in the morning after weak producer inflation figures were released.
Brady said that the morning session was strong, with strong futures trade pushing the market higher.
As information about the Budget came through at 2.00pm, the market had a strong surge, before easing back to its earlier levels shortly after 3.00pm. By close of trade the overall market was up 0,98% with the financial and industrial boards up 1,28% and 1,78% respectively. Volume on the day was good, with R2,5-billion changing hands.