RAND AND BOURSE RETREAT

THE RAND fell yesterday as emerging-market (EM) currencies reeled under pressure from a firmer dollar, while investors awaited finance minister’s budget speech next week and a Moody’s rating review next month for clues about the domestic economy.

At 5pm, the rand bid at R15.1057 to the dollar, 0.86 percent weaker, off a session-best R14.9280 on Wednesday.

Investors pared EM assets as coronavirus cases rose in South Korea and research suggested that the pathogen is more contagious than initially thought.

The rand also faces onshore risks linked to continued power outages and weak economic growth.

Finance Minister Tito Mboweni will present the 2020 budget to parliament next Wednesday, while Moody’s – the last of the top three agencies to rate the country’s debt at investment level – is set to review ratings next month.

“Risks continue to stack up for the rand, as high political tensions domestically hold up the implementation of key policy reforms, ... while the risk premium in the rand is rising as markets fear a greater likelihood of a Moody’s downgrade,” Annabel Bishop, chief economist at Investec, wrote in a note.

In fixed income, the yield on the 2030 government issue was down 4 basis points to 8.85 percent.

On the stock market, the JSE Top40 fell 0.18 percent at 52 033.26 points, with the broader all share was 0.26 percent weaker at 57 793.03 points.

Woolworths closed down 4.42 percent at R42.40 after the company reported a 17.7 percent drop in half-year earnings, dragged down by a number of product issues in womenswear and disappointing Black Friday sales. Truworths International rose 3.56 percent to R45.64 after the fashion retailer reported a rise in first-half earnings.

Meanwhile, EM stocks faltered on fears of a global spread of the coronavirus after a spike in new cases in South Korea, while currencies in the developing world reeled under pressure from safe-haven buying of the dollar. I Reuters