Rand slips on profit taking, bourse higher

THE RAND retreated on Wednesday ahead of yesterday’s bank holiday, with investors booking profits from the previous session’s rally and closing positions as the dollar bounced back on the latest US and China trade war twist.

At 5pm on Wednesday, the rand was 0.6 percent weaker at R13.4150 to the dollar, having fallen to a session low of R13.48 after a firm start to the day that saw it test the R13.20 level before losing steam.

The rand lost further ground yesterday and bid at R13.5826 to the greenback at 5pm.

Retaliatory trade tariffs by China lifted the dollar a mild boost, clearing out remaining rand bulls weary of sharp moves in low liquidity conditions with the JSE closed yesterday for the Women’s Day holiday.

China’s commerce ministry said it would impose additional import tariffs of 25 percent on $16 billion (about R213.8bn) worth of US goods, ranging from oil and steel products to autos and medical equipment.

The rand has traded below the crucial R13.50 support for the whole week, but made little progress in breaking the R13.20 re- sistance, preventing traders from taking any major positions with the lack of clear momentum in either direction.

Bonds were flat, with the yield on the benchmark paper due in 2026 unchanged at 8.69 percent.

On the bourse, MTN Group topped the decliners on the JSE Top40 index after the continent’s biggest mobile operator reported a 7 percent drop in half-year profit.

The all share index was slightly up 0.14 percent to 57 786.31 points, while the Top40 index rose 0.07 percent to 51 615.86 points.

Following the release of its negative half-year numbers, MTN shares fell 8.11 percent to R104.85.

Construction firm Aveng surged 12.5 percent to 9 cents after its rival Murray & Roberts withdrew plans for a potential merger with it.

Shares were also driven by announcements that Aveng will go through with its early bond redemption as soon as possible in order to reduce its debt burden and improve liquidity.

Meanwhile, US stock index futures ticked higher yesterday, with the S&P 500 aiming at a fresh record, as the second-quarter earnings season winds down on a strong note.