Rand firms after economy inches up

The rand firmed below R19 to the dollar on Tuesday after data showed the SA economy growing marginally in the fourth quarter of 2023.

Data from Stats SA shows the economy grew 0.1% in the three months to end-December, after a 0.2% decline in the third quarter, but missed market forecasts of 0.3% growth.

The data showed GDP in the fourth quarter was R1.158-trillion, above the pre-Covid-19 reading of R1.150-trillion but still below the peak of R1.161-trillion recorded in the third quarter of 2022.

On an annual basis, the economy grew 0.6% in 2023 after expanding 1.9% in 2022, “underscoring a cautious economic recovery trajectory amid global and domestic challenges”, said IG senior market analyst Shaun Murison. “The rand has strengthened post the release of local GDP data, despite the figure being underwhelming. The strength in the rand is similar to what we are seeing in some other commodity-driven currencies, perhaps supported by gains in key exports such as gold, copper, and coal [on Tuesday],” Murison added.

At 5.54pm, the rand had strengthened 0.39% to R18.9278/$, having touched an intraday best of R18.8788/$ — the best level in almost two weeks. It had firmed 0.29% to R20.5757/€ and was little changed at R24.0964/£. The euro was 0.16% firmer at $1.0872.

Adriaan Pask, CIO at PSG Wealth said, “Protracted load-shedding and political uncertainty are expected to continue to weigh on the SA economy and investor sentiment. However, these risks are already priced into very depressed valuation levels in large portions of the local market. Our outlook for local equities therefore, remains favourable.”

The JSE all share lost 0.54% to 72,241 points, with major indices mixed, while the top 40 was down 0.61%.

Shares in precious metals producer Sibanye-Stillwater led the losses on the JSE, falling the most in more than a month after the company reported a loss of R37.4bn for 2023, compared with a R19bn profit in 2022. The largest contributor was impairments of R47.5bn against various assets due to the plunge in metals prices.

It also decided to declare no final dividend for the year after paying an interim dividend of 53c per share. In 2022 Sibanye paid a total dividend of R2.60 per share.

The company’s share price fell 5.69% to R18.22.

At 6.10pm, the Dow Jones industrial average was 0.69% weaker at 38,720 points, while markets were also weaker in Europe.

Gold gained 0.53% to $2,125.17/oz, while platinum lost 1.41% to $882.83/oz. Brent crude was down 0.36% to $82.33 a barrel.