Trading Day – Rand strengthens as Ramaphosa survives another round

Cyril Ramaphosa survived another round as ANC parliament members overwhelmingly voted to reject the Phala Phala report, signifying an enormous show of support ahead of the party’s conference.

The Rand strengthened on the news from R17.73 against the US dollar to R17.27/$.

US markets rallied on lower-than-expected inflation but remained cautious ahead of the Fed meeting. The S&P 500 closed 0.7% higher, while the Nasdaq climbed 1%.

Both the Nikkei 225 and the Hang Seng are up 0.7% in early morning trade.

Sam Bankman-Fried has been denied bail in the Bahamas, as judge cites flight risk.

Here is the biggest news of the day.

• Cyril Ramaphosa survives another round as ANC parliament members overwhelmingly vote to reject the Phala Phala report. The Rand strengthened on the news from R17.73 against the US dollar to R17.27/$. While the party’s top leadership had instructed ANC members to reject the report, five members closely aligned to the Zuma faction in the party broke ranks and voted for Parliament to adopt the report. This includes Traditional Affairs Minister Nkosazana Dlamini-Zuma, along with Mosebenzi Zwane, a former mines minister, and Supra Mahumapelo, a former premier of the North West province.
• US inflation cools as November’s CPI comes in lower than expected. The consumer price index (CPI) for November rose just 0.1% from the previous month and 7.1% from a year ago. Estimates were for a 0.3% increase month-over-month and 7.3% year-over-year. US headline inflation has been trending down since it peaked at just over 9% in June. This also marks the second consecutive month where core inflation, which strips out the more volatile food and energy components, has declined. Core CPI rose 0.2% month-over-month and 6% year-over-year. Estimates were for a 0.3% increase month-over-month and 6.1% year-over-year.
• Sam Bankman-Fried denied bail in the Bahamas, judge cites flight risk. Bankman-Fried will be remanded to custody until February 2023. The criminal charges against him were unsealed and has been confirmed to include eight criminal counts: conspiracy to commit wire fraud and securities fraud, individual charges of securities fraud and wire fraud, money laundering, and conspiracy to avoid campaign finance regulations.
• Several Nampak directors also heading for the exit. Nampak CEO Erik Smuts sold close to 1.1 million shares for a total value of R1.34 million. CFO Glenn Fullerton sold just under 100,000 shares for a value of R116,000, while several other directors and prescribed officers sold shares for a combined value of just over R330,000. The shares sold included long-term incentives that had vested under Nampak’s Deferred Bonus Plan and Performance Share Plan.