South African assets soared on Thursday with the rand at near three-year highs after scandal-ridden President Jacob Zuma resigned, clearing the way for the more business-friendly Cyril Ramaphosa to take over, while broader emerging stocks rallied. The rand extended gains to firm 0.7 percent and stocks leapt 3.6 percent to two-week highs, set for their biggest one-day gain September 2015. South African stocks Old Mutual and Anglo American were also among the top gainers on Britain's FTSE 100 in early trading, up 4 percent and 3 percent respectively. Zuma's resignation on Wednesday clears the way for Ramaphosa to press on with long-awaited structural reforms. Per Hammarlund, chief emerging markets strategist at SEB, said Ramaphosa's state of the nation address, expected on Friday, would be critical as he would need to set out a reform path acceptable to the ruling ANC party's wider membership. "He's going to have come out sounding pretty strong. It's been a bruisi ng battle to get Zuma out and he needs to show he is the undisputed leader and he has the momentum to get the work going," Hammarlund said. On the debt side, the average yield spread of South African sovereign bonds over U.S. Treasuries on the JPMorgan EMBI Global fell 4 basis points (bps) to 239 bps. Five-year credit default swaps for South Africa fell 4 bps from Wednesday's close to 151 bps, according to IHS Markit data. Local benchmark 10-year bond yields, which had topped 9.5 percent in November, fell to 8.29 percent, the lowest since March 2017. Sergey Dergachev, a senior portfolio manager at Union Investment, said South Africa's upcoming budget and a ratings decision from Moody's would be a key focus for debt investors. "Once these big decisions are behind us, I think South Africa could offer a good opportunity," he said. Emerging markets as a whole were also trading stronger, with MSCI's benchmark index up 1.5 percent in a fourth straight day of gains. Hammarlund said investors had seen a buying opportunity after last week's sharp correction. Hong Kong shares led the pack, up almost 2 percent in half a day of trading ahead of the Lunar New Year holiday. Other big Asian markets such as South Korea and Chinese mainland bourses were already closed. Emerging Europe made strong gains, with Turkish stocks up 1.5 percent and Moscow shares 0.8 percent. With the dollar index weakening by 0.5 percent, emerging currencies such as the Mexican peso firmed 0.6 percent. Tunisia's 2025 dollar bond was trading slightly firmer at 94.8 cents after slumping to its lowest point since last July on Wednesday when central bank governor Chedli Ayari resigned, paving the way for a World Bank official to be appointed in his place. -Reuters