Rand stretches gains, EOH tum­bles 9%

The Star Early Edition - - PRICES -

THE RAND added to re­cent gains yes­ter­day, re­main­ing in favour with in­vestors in search of higher yields as the dol­lar eased on dim­ming hopes of in­ter­est rate hikes soon.

By 5pm, the rand had gained 0.2 per­cent to R12.9278 com­pared to its close of R12.9550 overnight in New York.

The lo­cal unit burst through the 13 psy­cho­log­i­cal mark on Mon­day on its way to a two-week best as last week’s de­ci­sion by govern­ment to sus­pend new min­ing laws combined with weak US eco­nomic data soothed in­vestor anx­i­eties.

High-yield but riskier as­sets were buoyed by the dol­lar’s con­tin­ued slide fol­low­ing weaker-than-ex­pected hous­ing data and the col­lapse of a health bill.

Mean­while, stocks were lower with South Africa’s largest tech­nol­ogy group EOH Hold­ings fall­ing al­most 9 per­cent af­ter al­le­ga­tions of cor­rup­tion sur­faced. The firm de­nies wrong­do­ing.

The bench­mark JSE Top40 in­dex dropped 1.2 per­cent to 46 927.84 points, while the all share in­dex lost 1.05 per­cent to 53 261.64 points.

EOH was the big­gest faller on the all share in­dex, drop­ping 8.81 per­cent to R115.80 a share, af­ter an opin­ion piece in Busi­ness Re­port news­pa­per ac­cused the com­pany of be­ing in­volved in im­pro­pri­ety in its con­tracts with South Africa’s wel­fare agency.

“It’s a very con­tro­ver­sial ar­ti­cle and paints them in a very neg­a­tive light, that cre­ates un­cer­tainty and mar­kets don’t like it. Share­hold­ers have had a knee-jerk re­ac­tion and there’s been a sell-off,” In­de­pen­dent Se­cu­ri­ties trader, Ryan Woods said. Sho­prite re­treated 2.71 per­cent to R200 af­ter it said trad­ing con­di­tions re­mained chal­leng­ing in the sec­ond half of its fi­nan­cial year.

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