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JOHANNESBURG, Jan 22 (Reuters) - South African markets strengthened on Monday, driven by optimism about the prospects for change under the new leader of the ruling African National Congress (ANC).
At 1513 GMT, the rand traded at 12.1100 per dollar, 0.49 percent firmer than its New York close on Friday.
The ruling ANC discussed last week removing President Jacob Zuma as head of state but no decision or date for his departure was agreed, Secretary General Ace Magashule said on Monday. There has been widespread speculation in local media that the ANC's 80-member Executive Committee passed a resolution at the weekend calling for the removal of Zuma as South African president. Any sign that Zuma could step down before his second presidential term ends in 2019 has tended to lift South African assets, including the rand currency .
The rand has rallied to a 2-1/2 year high since union leader-turned-businessman Cyril Ramaphosa won the ANC leadership on Dec. 18 as investors bet he would crack down on corruption and implement policy reforms. The ANC's electoral dominance means he will almost certainly be South Africa's next president.
On Saturday a government committee headed by Ramaphosa appointed a new board at state-owned power utility Eskom to help tackle governance concerns.
"The financial markets have reacted very positively to these and related developments in the ANC, as have many of the disaffected voices who last year were clamouring for change in the ruling party," said NKC African Economics analyst Gary van Staden.
Government bonds firmed alongside the currency, with the yield for the benchmark instrument falling 9 basis points to 8.405 percent.
On the equities market, the Johannesburg All-Share index rose 0.27 percent to 61,078 points, while the Top-40 index climbed 0.2 percent to 54,165 points.
Banks , which usually respond to political developments, were among the top gainers, with that index up 2.48 percent to 9,627 points.
South African retailer Steinhoff closed 7.75 percent higher to 8.20 rand after it said it plans to sell about 7.5 billion rand ($620 million) of shares in investment firm PSG Group as it scrambles to plug a liquidity gap after it disclosed "accounting irregularities". (Reporting by Nqobile Dludla; Editing by Catherine Evans)
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