Rand slides on investor caution, JSE up

THE RAND weakened yesterday as investors looked elsewhere in high-yield emerging markets for carry-trade opportunities.

At 5pm, the rand was bid at R13.0336 to the dollar, 6.93c softer than at the same time on Monday, just shy of its weakest level in three sessions as a breach of the 13 mark confirmed technical indicators pointing to a bear run in the coming days.

Caution ahead of a meeting by US central bank also saw sluggish liquidity and a sell bias on the rand, more so after US consumer confidence came in better than market forecasts.

“Although the rand has performed resiliently despite various local factors, it has thus far failed to make any new lows,” Reezwana Sumad, an analyst at Nedbank, said in a note.

“Technically, this would suggest a significant possibility of a test toward the upper end of the prevailing range,” Sumad said.

Bonds were slightly weaker, with the yield on the benchmark bond due in 2026 rising.

Meanwhile, stocks gained yesterday as Kumba Iron Ore rose after resuming dividend payments.

The benchmark, the JSE Top40 index gained 0.34 percent to 48 223.29 points, while the broader all share index edged up 0.24 percent to 54 499.11 points.

Shares of Kumba Iron Ore, a unit of Anglo American, advanced 17.34 percent to R203 after the company reported a 53 percent jump in half-year earnings.

The iron ore producer said it was resuming dividend payments, which were halted in 2015, as part of a policy to return excess cash to shareholders.

Anglo American shares also gained, advancing 7.49 percent to close at R199.55.