January 23, 2018 / 4:30 PM / a year ago

UPDATE 1-South African rand drifts lower; stocks at record high

(Updates to reflect afternoon trading)

JOHANNESBURG, Jan 23 (Reuters) - South Africa’s rand drifted lower on Tuesday as investors waited for more clues from the new leader of the ruling African National Congress on how he plans to rejuvenate the economy and when President Jacob Zuma might step down.

At 1620 GMT, the rand was down 0.2 percent at 12.0800 per dollar, eating into gains of around one percent a day earlier after the ANC confirmed it was discussing whether to push for Zuma’s removal as head of state.

The South African currency has surged since Cyril Ramaphosa won the race to succeed Zuma as ANC leader last month, putting him in pole position to become the country’s next president.

Ramaphosa, currently deputy president, is leading South Africa’s delegation to the World Economic Forum in Davos this week and has pledged to fight corruption and woo foreign investment.

His allies in the ANC are pushing for him to take over from Zuma as state president in the coming weeks.

A currency trader at Rand Merchant Bank said the rand was likely to trade in tight ranges until Zuma’s fate became clearer. But a break below 12.00 to the dollar could trigger further rand gains, he said.

On the equities market, South Africa’s main stock index closed up 0.68 percent at a new record-high on Tuesday and the blue-chip JSE Top-40 index ended up 0.66 percent.

Lewis Group topped gainers, rising 17.70 percent to 28.60 rand after the budget furniture retailer reported a 13.3 percent rise in same-store quarterly sales.

Government bonds were little changed, with the yield for the benchmark 2026 instrument at 8.35 percent.

Reporting by Alexander Winning and Tiisetso Motsoeneng, Editing by William Maclean

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