Rand weakens after Ramaphosa speech

The rand broke through R19/$ on Friday after President Cyril Ramaphosa’s state of the nation address late on Thursday, which analysts criticised as short on detail.

“The president announced no new initiatives, nor provided any new information, but rather reassured the public that the government’s plans and policies would yield results,” said Nedbank ’ s economic unit.

“Ultimately, it was an election speech, with a focus on government’s achievements.”

After earlier weakening to R19.0634/$, by 6.50pm on Friday the rand had recovered some of its losses to be down 0.47% to R19.0327/$. At the same time it had dropped 0.56% to R20.5208/€ and 0.54% to R24.0364/£.

Nedbank said that the “upbeat cando tone of the speech was formulated with the election in mind”. While there had been some “constructive reforms” in the energy sector, the country was not out of the woods as far as the energy crisis was concerned.

There was also “little evidence” that any real progress had been made in addressing crime and corruption, said the bank said.

The JSE was also weaker on the day, with mining stocks bearing the brunt of the losses.

The all share fell 0.41% to 73,423 points while the top 40 was down 0.52%. The precious metals and mining index dropped 2.22% and resources 2.02%.

The biggest losers included Impala Platinum which tumbled the most in three months, down 7.72% to R62.31. The share price peaked at R234 just more than a year ago but has been dogged by lower metal prices and impairments since.

Impala Platinum said in a trading statement on Thursday that it expects interim headline earnings to endDecember to fall by as much as 82%.

Sasol ’ s share price fell 3.9% to R146.55 after it said on Friday it expects interim profit to end-December to fall 28%-42% on lower oil and chemical prices, coupled with costs associated with the country’s electricity and logistics crises.

The company’s share price saw a peak of R430 in June 2022, after it had tumbled to as low as R24 in the early stages of the Covid-19 pandemic.

Most precious metal prices fell on Friday with gold down 0.57% to $2,022/oz and platinum 1.66% to $869.60/oz.

Brent crude was marginally weaker at $81.50 a barrel.

Global share markets were generally lower with the Dow Jones industrial average falling 0.26%.

The FTSE 100 weakened 0.28% while stocks in France and Germany both lost about 0.25%.