Rand falls as investors look to safer dollar ahead of Iran decision

THE RAND lost further ground to the dollar yesterday as US President Donald Trump’s impending decision on Iran’s nuclear deal spurred safe-haven demand for the greenback.

At 5pm, the rand was bid at R12.61 to the dollar, compared with R12.57 at the same time on Monday. The local currency was little changed against the euro, strengthening to R14.97, compared with R14.98, while it weakened to R17.08 against the pound, compared with R17.06.

Nedbank analyst Mehul Daya said the rand will continue to trade in line with the international environment, which will be dictated by the dollar.

“Should the dollar continue on its path stronger, we leave the likelihood open that the rand will move closer to our R12.80 against the dollar target, which we only expected to materialise in the second half of 2018,” Daya said.

The JSE closed yesterday’s trading session slightly in the red, with miners and financials on the back foot.

The FTSE/JSE All Share Index (Alsi) shed 215 points to 57 665, while the bluechip top 40 index lost 146 points to 51 002. Gold-mining shares bled 0.99%, while financials shed 0.68%.

Industrials were flat, down just 0.008%, while resources were down 0.51%.

Among yesterday’s gains, Net1 Technologies soared 13.97% to R106.11. Listed property developer Calgro M3 Holdings surged 20% to R15.00 and Brimstone inched up 14.96% to R12.99.

Franchising company Gold Brands Investments plunged 38.18% to R0.34. Brainworks tanked 83.13% to R1.35, and embattled construction group Basil Read bled 16.67% to R0.20.

Dave Mohr, the chief investment strategist at Old Mutual Multi-Managers, said the weaker rand helps the large companies that generate most of their revenues abroad. “The weaker currency also means local investors saw the benefit of positive global equity markets in rand terms. The local equity market recovered some of the losses of February and March during April,” Mohr said.

“The Alsi returned 5.4% in April, but the first few days of May have been choppy.” – Kabelo Khumalo