Land decision hangs over rand

THE RAND headed into this week with the dark cloud of the reaction from the land expropriation decision last week hanging over it.

TreasuryONE chief currency dealer Andre Botha said it was likely that this issue would be at the top of the agenda of this week’s cabinet meeting.

“The market is waiting for some clarity regarding the issue, and should the details continue to be murky, we could see the rand on the back foot, as uncertainty plus emerging markets don’t gel,” said Botha.

At 5pm yesterday, the rand was bid at R13.41 a dollar, 11 cents weaker than Friday’s same-time bid. Against the pound sterling, the rand was 4c softer at R17.35, while the rand eased 8c to R15.50 against the euro.

Peregrine Treasury Solutions corporate treasury manager Bianca Botes said the land debate was causing some uncertainty in both local and global markets, as no investor liked uncertainty – even less so when the global market was risk-averse.

“The rand remains on the back foot with pressure from politics, both locally and globally, likely to add to the currency’s woes.

“Efforts by the Chinese Central Bank to counter a rapid sell-off of the yuan by increasing the reserve requirement on forward positions assisted the Asian market, an effect that will filter through to emerging markets as a whole,” said Botes.

Dynamic Outcomes head market analyst and director James Paynter said although the expropriation-without-compensation debate kept uncertainty at a high, it would be more a question of what is happening on the international front this week.

JSE stocks were not spared, with the blue-chip Top40 Index giving up 0.4% to 50784.44 points, while the broader All Share Index shed 0.45% to 56 861.21 points.

Leading the losses among major movers were the JSE, which was 4.91% lower at R155, followed by Impala Platinum, which fell 4.6% to R18.86. AECI declined 4% to R103.70, while Absa dropped 2.98% to R166.16.

Among top gainers were RCL Foods, which added 1.55% to R17, followed by PSG Konsult which was 1.33% higher at R9.89. Echo Polska Properties gained 1.08% to R18.69, while Spar grew 0.91% to R194.01 and Richemont inched up 0.83% to R116.94.