Rand ends week softer, stocks flat
THE RAND weakened on Friday, faltering in the face of technical barriers and political worries after an executive at the power utility Eskom was suspended pending an investigation into graft allegations.
By 5.45pm on Friday, the rand had weakened 0.17 percent to R13.0125 to the dollar, compared with a close of R12.99 overnight in New York on Thursday, extending losses to a second consecutive session as it failed to break the 12.80 resistance level.
“The rand once again failed to make any meaningful or sustained gains, faltering short of the 12.80 technical pivot. We remain in the greater range which has been prevalent for some time now,” said analyst at Nedbank, Reezwana Sumad.
Sentiment towards the currency was also hurt by reports late on Thursday that the chief financial officer of state power firm Eskom, Anoj Singh, had been placed on special leave. Eskom said it was investigating claims Singh had granted preferential treatment to bidders supplying coal to the state-owned company .
Eskom relies on state guarantees amounting to about R350 billion to stay afloat. Rating agencies have called it a danger to the country’s credit status.
Bonds were weaker, with the yield on the benchmark 2026 paper rising.
Meanwhile, stocks were little changed on both the JSE Top40 index and the wider all share index. The former closed at 48 551.29 points and the latter at 54 883.21 points.
The mining index was up 0.8 percent and the bullion index up 2.74 percent as global resource prices climbed.
Underwhelming economic growth in the US bolstered bets the country’s interest rates would remain low. Gold Fields rose 3.59 percent to R52.25 and AngloGold Ashanti gained 3.16 percent to R131.40.
Shares of the South Africa arm of the Barclays Group dropped 2.16 percent to R143.93 despite reporting that half-year profit increased 7 percent.
Meanwhile, global stock markets retreated on Friday as tobacco shares dropped and Amazon earnings disappointed, while oil prices added to recent gains and were on track for their biggest weekly percentage rise this year.