Rand stronger, Steinhoff weighs on JSE

THE RAND rose yesterday, helped by a dip in the dollar after disappointing US inflation data, with local market focus still on the ANC conference starting this weekend to pick a new party leader.

The all share index eased, with financials, telecoms and energy shares making modest gains but not quite offsetting losses in Steinhoff and gold shares.

At 5pm, the rand bid at R13.5363 to the dollar, 12.30c firmer than at the same time on Tuesday.

The dollar weakened after US consumer price data showed sluggish inflation, adding to concerns the US Federal Reserve would be less able to execute multiple rate increases next year. The Fed was scheduled to announce its decision on rates last night.

Locally, investors’ focus remained on the ANC conference where the party will crown a new leader to succeed President Jacob Zuma, who can remain president of the country until 2019.

“There won’t be anyone wanting to hold any type of position going into this weekend. Investors, offshore and locally won’t be keen on holding anything substantial so its likely to be a wait-and-see until next week,” said Standard Bank forex trader, Oliver Alwar.

In fixed income, the yield for the benchmark government bond due in 2026 dropped 6 basis points to 9.215 percent, reflecting stronger bond prices.

On the bourse, the benchmark JSE Top40 index and the all share index declined 0.31 percent to 51 151.27 points and 57 344.41 points, respectively.

Steinhoff led the decliners, tumbling 16.67 percent at R9.80.

The multinational retail group’s share price has plunged since announcing last week that its chief executive had quit and that it had found problems with its accounts which has delayed the reporting of its financial results.

AngloGold Ashanti declined 2.12 percent to R121.37, Gold Fields weakened 1.81 percent to R49.90, while Harmony Gold was down 1.78 percent to R22.10.

Gold prices held near their lowest in nearly five months as investors looked ahead to an expected US interest rate increase.

At 6.35pm, gold was at $1 245.70 (about R16 992) an ounce.

Gold is sensitive to rising rates because they push up bond yields, reducing the appeal of non-yielding gold.