Cape Town - South Africa’s rand strengthened to a one-month high against the dollar, leading global currency gains, amid speculation that Anheuser-Busch InBev has started buying the currency to pay local shareholders for its $104 billion acquisition of SABMiller.
The rand gained 1 percent to 13.7708 per dollar by 9.21am in Johannesburg, bringing the advance in the past six days to 4.5 percent, the longest winning streak since March 2014.
Inflows from the SABMiller purchase may amount to as much as R100 billion ($7.3 billion), John Cairns, a currency strategist at Johannesburg-based Rand Merchant Bank, said in an emailed note on Wednesday.
AB InBev’s offer was accepted by SABMiller’s board on July 29, and faces its next hurdle when SABMiller’s shareholders vote next week.
“We think it is possible that AB InBev started buying rand this week to pay for its SABMiller buyout of local shareholders,” Cairns said. “This would explain the rand gains in the last two days, although not the outperformance of last week. The bottom line: actual or speculated SABMiller-related flows will provide significant help to the rand for weeks to come.”
BLOOMBERG