Rand struggles to recover, bourse lower
THE RAND, still smarting from South Africa’s weak growth figures released last week, opened just a tad firmer after weakening to R13.29 to the dollar on Friday, with analysts citing a global selloff in emerging markets (EMs).
Investec’s chief economist, Annabel Bishop, said the currency’s performance on Friday showcased its inherent characteristic of volatility as an EM currency.
Sell-off
“Marked global risk-off has seen a substantial sell-off of EM debt in general, but the key point for the domestic currency is that it would likely be much weaker currently, indeed closer to R17 to the dollar, R19 to the euro and R22 to the pound, without the Ramaphosa Presidency effect.”
At 5pm the domestic currency was bid 1c weaker than Friday’s same time bid at R13.12 a dollar. Against the pound, the rand was 1c softer at R17.57 and to the euro the currencey eased 8c to R15.48.
TreasuryONE’s Andre Botha said there wasn’t a run to safe havens as gold, and the dollar hardly moved on the back of the EM rout.
“The fact that EM’s was so aggressively sold off in the latter part of last week could be that investors are merely positioning themselves for the week ahead, where we expect the US Federal Open Market Committee to hike interest rates in the US,” said Botha.
Equites
Stocks also took a knock with the JSE’s blue chip Top40 index falling 0.9 percent to 51 835.44 points, and the broader all share index declining 0.13 percent to 58 146.10 points.
The biggest losers among bourse heavyweights were Vodacom, which declined 2.87 percent to R140.31, followed by Capitec Bank, down 2.05 percent to R865.95.
Anglo American Platinum dropped 1.78 percent to R339.30, while NEPI Rockcastle lost 2.13 percent to R127.23 and Bidvest Group fell 1.85 percent to R199.
Top gainers among large caps were AB InBev, which increased 2.73 percent to R1 270.85, followed by Investec Plc, which added 1.97 percent to R98.64.
British American Tobacco grew 1.98 percent to R656.42, while Mondi Plc ticked up 1.69 percent to R374 and Kumba Iron Ore advanced 1.52 percent to R320.