Rand, bonds softer, JSE inches lower

THE RAND and bonds were weaker yesterday, as investors refrained from making any large moves ahead of Finance Minister Malusi Gigaba’s budget speech today.

At 5pm, the rand bid at R13.7633 to the dollar, 3.08c softer than at the same time on Monday.

Gigaba will deliver his first medium-term budget policy statement in parliament.

A Reuters poll found poor tax receipts could push the 2017/18 budget deficit forecast to 3.9 percent of gross domestic product from an estimate of 3.1 percent in February.

“The former minister of finance, Pravin Gordhan delivered a prudent and highly redistributive fiscal budget in difficult economic circumstances,” said Economists at NKC African Economics in a note.

“However, it remains to be seen if his successor Malusi Gigaba will stick to this path as there are concerns that his enthusiasm for increased black economic empowerment and nuclear energy could see a widening of the country’s budget deficit.”

On the equities market, the all share index fell 0.16 percent to 57 904.72 points, while the Top40 index closed 0.14 percent lower to 51 597.49 points.

Gold stocks and platinum producers weakened 0.96 percent and 0.66 percent, respectively due to lower prices as investors nervously awaited news on the next head of the US central bank.

Kumba Iron Ore, a member of the Anglo American group, closed 2.84 percent lower to R266.57 after reporting a 2 percent decrease in the third quarter output.

Government bonds were also weak, an the yield for the benchmark instrument due in 2026 up.