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South Africa’s rand firms slightly, Steinhoff jumps 36% on $1 bln settlement progress

Adds latest prices, analyst comments

JOHANNESBURG, Oct 12 (Reuters)South Africa’s rand firmed slightly on Monday, clinging to the previous week’s gains spurred by hopes for the conclusion a stimulus package in the United States.

At 1500 GMT the rand ZAR=D3 was 0.14% firmer at 16.4750 per dollar compared to an close of 16.4975 on Friday in New York.

The expectations of stimulus in the world’s largest economy have provided a welcome boost for the rand by weakening the dollar .DXY and boosting appetite for risk-sensitive currencies.

Traders, however, warned that the cheer was thinning. On Friday, President Donald Trump offered a $1.8 trillion coronavirus relief package in talks with House Speaker Nancy Pelosi – moving closer to Pelosi’s $2.2 trillion proposal.

A holiday in the United States kept volumes thin and traders cautious of any big bets.

Locally, anticipation ahead of Thursday’s address in parliament by President Cyril Ramaphosa, in which he has promised to outline the government’s economic recovery plan, has also kept trading on the cautious side.

Treasury is set to publish its medium term budget (MTBPS) in two weeks time.

“The rand continues to average around R16.50/$ this quarter, in line with our forecasts, and will be subject to volatility, with risks around the MTBPS, Moody’s, S&P and Fitch country reviews and global financial market sentiment,” said Annabel Bishop of Investec.

Bonds firmed, with the yield on the benchmark 2030 paper ZAR2030= down 6 basis points to 9.435%.

In the equities market, the Johannesburg All Shares index .JALSH closed 0.67% firmer at 55,552 points while the Top-40 index .JTOPI climbed 0.74% to 51,158 points.

Leading the gainers was troubled retailer Steinhoff SNHJ.J, which continued to rise after it said on Friday discussions about a $1 billion settlement with various litigants are progressing and is requesting consent support from its financial creditors.

Shares in Steinhoff jumped 36% to 1 rand, a level last seen on Aug. 3

Construction firm Murray & Roberts’ MURJ.J share price rose 7.26% after the group announced that its Australian company’s joint venture was awarded a large energy contract.

($1 = 16.4697 rand)

(Reporting by Mfuneko Toyana and Nqobile Dludla; Editing by Kirsten Donovan and Toby Chopra)

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