The rand firmed as much as 1.9% to the dollar after the ANC voted to keep President Cyril Ramaphosa on for a second term.
Ramaphosa beat rival former health minister Zweli Mkhize by more than 500 votes.
The result is good news for Ramaphosa’s reform agenda, which aims to get the country back on an economic growth path that faltered during former president Jacob Zuma’s years at the helm, when state capture devastated the economy.
“This is very good news for the business sector and SA economy in general,” said Independent Securities portfolio manager Harold de Kock.
“It will allow Ramaphosa to focus on our major challenges, most especially load-shedding.”
At 12.11pm the rand had firmed 1.78% to R17.24/$, 1.03% to R21.05/£ and 1.37% to R18.32/€.
De Kock said he expected the rand to break back below R17/$, which is where it “should be and was just a few days ago”.
“With this being his second and last term, Ramaphosa now has greater freedom to bring the structural changes that are required for the economy to grow.
While the JSE all share index was a little lower, banks and financials stood out with significant gains.
De Kock said: “A strong recovery in financial stocks is likely, most specifically the banks, while we should also see gains in consumer-led companies such as retailers, as well as telecom counters Vodacom and MTN.”
TreasuryOne currency strategist Andre Cilliers said: “The market received the news very well and the rand immediately responded by trading stronger.”
“A second term for President Ramaphosa brings back some stability, something that financial markets like a lot,” said Cilliers.
By the JSE’s close the bank index had gained the most since late May, up 4.08%, while financials added 3.36% and retailers 1.42%.
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