RAND RETREATS, JSE ADVANCES

THE RAND weakened by more than 1 percent yesterday, as dampened risk sentiment over the coronavirus outbreak in China added to worries about the local economy after state power firm Eskom announced the resumption of rolling blackouts.

At 5pm, the rand bid at R14.7421 to the dollar, 14 cents softer than at the same time on Wednesday, bringing losses for the month to nearly 5 percent and making it the third worst-performing currency globally as the breathing room it gained in late-2019 evaporated.

The rand is typically sensitive to swings in risk sentiment and has been punished more than similar commodity-linked currencies by fears that the coronavirus outbreak in China will hurt economic growth in the world’s top resource consumer.

Its slide was accelerated by news that state power firm Eskom would resume nationwide electricity cuts, rattling already shaky investor sentiment leading up to the February 26 budget in which the treasury is set to announce a lower growth outlook.

The IMF said yesterday it saw growth in South Africa at 0.8 percent in 2020, which was lower than the local central bank’s forecast of 1.2 percent. The IMF cited bailouts to state firms as the main drag on growth.

Bonds also weakened, with the yield on the benchmark 2026 government issue adding 1.5 basis points to 8.04 percent.

In the equities market, stocks gained, with Massmart Holdings among the top climbers, up 6.44 percent to R53.75 as the retailer unveiled a turnaround plan spearheaded by its new chief executive, Mitch Slape.

The JSE all share index closed 0.39 percent firmer to 56 590.93 points, while the Top40 index climbed 0.42 percent to 50 552.71 points.

Gold stocks also helped the bourse higher as bullion prices held on to gains, supported by concerns over the potential impact on global economic growth of the coronavirus outbreak in China, which has killed 170 people. Gold Fields jumped 7.16 percent

to R95.28, while Harmony Gold rose 4.38 percent to R49.56.