Rand remains under pressure, JSE climbs

THE RAND started off on the back foot yesterday as the market awaited the outcome of the Federal Open Market Committee meeting where the Federal Reserve was expected to hike the US interest rate by 25 basis points.

Volatility in the domestic currency was evident in line with analysts’ expectations as it traded within a range of R13.21 to R13.40 before recovering some of its losses in afternoon trade.

Corporate treasury manager at Peregrine Treasury Solutions, Bianca Botes, said the local retail sales figures would largely be overshadowed by the US interest rate announcement.

“This would add pressure to emerging markets by increasing the cost of foreign government debt, as well as triggering a sell-off of emerging market (EM) assets as investors seek a safe-haven during these geopolitics-driven risk-off periods,” said Botes.

At 5pm the rand bid 3 cents weaker than Tuesday’s same time bid at R13.24 a dollar. Against the pound, the rand was 5c softer at R17.69 and to the euro, the currency eased 1c to R15.58.

Senior currency dealer at TreasuryOne, Andre Botha, said that for the moment the picture was not looking pretty, with the local unit being the worst performing EM currency.

“The reason for this is not clearcut, but we have seen significant portfolio outflows, which indicates that the market is a bit wary of EMs,” said Botha.

Meanwhile, JSE stocks closed higher with the blue chip Top40 index increasing by 0.56 percent to 52 200.03 points, while the broader all share index ticked up 0.39 percent to 58 437.23 points.

Top gainers were Glencore, which increased by 3.65 percent to R70.38, followed by Aspen Pharmacare, which added 3.07 percent to R273.13. Sappi gained 2.39 percent to R91.64, while Bid Corp was 2.28 percent higher at R278.20 and Hyprop Investments was up 2.08 percent to R103.87. Among lading losses were Vivo

Energy, which tanked 8.45 percent to R25.45, followed by Sibanye, which declined 4.29 percent to R8.47. Truworths decreased 3.28 percent to R81, while African Rainbow Minerals gave up 2.84 percent to R115.57 and Northam Platinum was 2.75 percent lower to end the day at R34.30.