RAND, BONDS FIRMER, JSE LOWER

THE RAND firmed yesterday after data showing an economic recovery from a recession continued in the fourth quarter (Q4) of last year, albeit at a slower rate.

At 5pm, the rand was 0.42 percent firmer at R14.1499 to the dollar, compared to its close of R14.20 on Monday.

South Africa suffered a recession in the first half of 2018 as farming plunged after a drought, but growth has since recovered.

The economy grew 1.4 percent in October-December 2018, after expanding by a revised 2.6 percent in the third quarter, Statistics SA said.

“Q4’s growth outcome signalled that the South African economy has muddled along, very slowly on the mend,” said Elize Kruger, an economist at NKC African Economics.

The Treasury has projected that the economy will grow 1.5 percent this year. But risks such as electricity supply shortages remain after struggling power utility Eskom resumed nationwide electricity cuts late in February.

Bonds firmed, with the yield on the benchmark paper due in 2026 dipping 6 basis points to 8.665 percent.

In equities, the local market shrugged off the GDP data as it opened in the green before losing all its steam at 9.30am and drifting lower for the rest of the trading session, with the all share index closing 0.71 percent lower at 55 815.43 points.

The blue chip Top40 index ended the session 0.62 percent weaker at 49 585.66 points. I Reuters