Rand weaker amid US-China tension
THE RAND weakened yesterday, giving up earlier gains despite the dollar treading water, amid global trade tensions before a US deadline to impose tariffs on Chinese imports.
At 5.15pm yesterday, the rand traded at 13.7350 per dollar, 0.46 percent weaker than its close on Tuesday.
Worried about the impact of a full-scale trade war, investors have been nervous about the Friday deadline when Washington is set to impose tariffs on $34 billion worth of goods from China. Beijing has vowed to match any moves with tariffs on US products.
“With trade tensions escalating by the day, market caution is set to remain a recurring theme moving forward,” FXTM research analyst Lukman Otunuga said. “Emerging market currencies are likely to be caught in the crossfire of the escalating tensions, with the rand falling into the category.”
In fixed income, the yield for the benchmark paper due in 2026 fell 9 basis points to 8.75 percent.
On the bourse, the Top-40 index was up 0.17 percent to 51 374 points and the broader All-Share Index rose 0.19 percent to 57 600.
The gold index was up 1 percent as AngloGold Ashanti rose 2.4 percent to R118.26, followed by Gold Fields. It gained 0.8 percent to R48.78 after gold prices rose to a one-week high yesterday, rebounding from a seven-month low in the previous session.
Among the biggest fallers, Healthcare provider Netcare was down 2.5 percent to R27.70 and miner BHP Billiton 2.77 percent to R295.65.
Retailer Steinhoff International continued its rollercoaster ride on the JSE yesterday, surrendering some ground it made on Tuesday after reports emerged that the group was mulling a takeover interest in its businesses, which include clothing chain Pepco, to chart a way for a recovery process.
Steinhoff shares eased 2.2 percent to R1.76 following a 39 percent rise to R1.80 on Tuesday, after the group announced that it would pay a dividend on its preference shares.
Steinhoff was not immediately available for comment on the Pepco interest, despite increasing speculation that it wanted to buy the company to revive its fortunes.
Analysts have said a formal auction of Pepco would come only after Steinhoff had agreed to a € 9.4 billion (R150.19bn) debtrestructuring deal with bondholders and other lenders.