JSE. Picture: MARTIN RHODES
JSE. Picture: MARTIN RHODES

THE JSE went into record territory on Thursday, outperforming emerging-market peers as South Africa’s smooth general election propelled global appetite for local bonds and stocks.

The vote of confidence for the country’s fifth democratic elections helped push the rand to its strongest level against the dollar this year.

Local bonds followed suit, the benchmark R186 bond climbing to its firmest level since mid-January.

The JSE all share closed 0.17% higher at 49,026.95 points with gains limited by the stronger rand, which took the shine off mining shares and rand-hedge counters.

The rand appreciated as far as R10.34 against the dollar from Monday’s worst level of R10.53/$.

In depth: Election 2014

Election poll 2014News, views and analysis of South Africa's national and provincial elections

The firm buying tone for local bonds, which according to Investec bond trader Kgosietsile Tshite had been triggered by a well-received government bond auction on Tuesday, led bonds to a more than four-month high.

Decreasing tension between Russia and Ukraine initially triggered the drive for risk.

Further comfort was provided by comments by US Federal Reserve chairwoman Janet Yellen on Wednesday signalling that US interest rates were unlikely to start ticking up before the middle of next year, with investors also welcoming positive trade data out of China yesterday.

"Everything fell in line today," Investec Asset Management’s head of emerging market dealing, Ryan Wibberley, said, adding that positive global developments were underscored by solid local elections.

He noted that foreign investors were particularly pleased by the stability of the election process and the predictability of the results.

"The way the results are panning out, with the ANC’s percentage of the national vote in the low 60s and the DA in the low 20s, was the foreseen result. If there had been any surprises or questions over the fairness of the process, foreigners would have voted with their feet."

The official election results are expected on May 10, with clarity on economic policy orientation probably due later this month.

"We will be watching the appointments to key economic ministries (ie the National Treasury, labour, trade and industry, energy, public enterprises)," Barclays Africa said.

"In particular, if Pravin Gordhan does not return as finance minister, we think that former Reserve Bank governor Tito Mboweni could be appointed in a market-friendly move," the bank said.