RAND AND BOURSE RETREAT

THE RAND fell yesterday, tracking the euro lower after the European Central Bank (ECB) pushed back its forecast for an interest rate hike and offered banks more cheap loans, while at home state power utility Eskom got smaller tariff hikes than sought.

At 5pm, the rand bid at R14.3836 to the dollar, 17 cents softer than at the same time on Wednesday.

The ECB changed tack on its tightening plan yesterday, pushing out the timing of its first post-crisis rate hike until 2020 at the earliest and offering banks a new round of cheap loans to help revive the euro zone economy.

The rand has suffered since breaching the R14 level last month as nationwide blackouts affecting ailing electricity firm Eskom weighed on sentiment.

Energy regulator Nersa yesterday granted cash-strapped Eskom above-inflation power price hikes over the next three years, but the increases were far below what the utility had asked for.

The yield on the benchmark 10-year government issue dipped 0.5 basis points to 8.675 percent.

On the bourse, the all share index lost 0.39 percent to 55 857.89 points, while the Top40 index closed 0.42 percent lower to 49 665.55 points.

Naspers dropped 2.65 percent to R3 130 after Hong Kong technology giant Tencent, which it has a 31 percent stake in, weakened. MTN leaped 18.06 percent at R89.80 after the company reported an 85 percent surge in headline earnings a share I Reuters