RAND AND BOURSE RE­TREAT

Pretoria News - - BUSINESS REPORT | STOCKS -

THE RAND weak­ened yes­ter­day as an­other bout of risk aver­sion dragged emerg­ing mar­ket cur­ren­cies lower, with in­vestors fret­ting over the im­pact of the coro­n­avirus and opt­ing for safe-haven as­sets.

At 5pm, the rand bid at R16.1250 to the dol­lar, 7 cents softer than at the same time on Tues­day, once again cross­ing the key tech­ni­cal thresh­old of R16 that traders have used to gauge likely di­rec­tion of the rand’s moves.

Since Mon­day’s sharp fall to R17, the rand has man­aged to claw back some ground, but on­go­ing un­cer­tainty about the ef­fec­tive­ness of mea­sures taken by cen­tral banks glob­ally to limit the coro­n­avirus has kept volatil­ity el­e­vated.

News that state power firm Eskom would cut up to 4 000 megawatts of elec­tric­ity from the na­tional grid, partly due to faults at its Koe­berg nu­clear plant, has also rekin­dled bear­ish bets on the lo­cal unit.

“Although a de­gree of calm has re­turned to the world’s fi­nan­cial mar­kets, there are var­i­ous fac­tors that could change this in­stantly,” Ned­bank’s Reezwana Su­mad said in a note.

“Lo­cally, the rand re­mains ex­cep­tion­ally vul­ner­a­ble. Any strength has been lim­ited and moves to the top­side have been more ex­treme, ex­ac­er­bated by the per­sis­tent woe­ful per­for­mance of the elec­tric­ity util­ity.”

Stocks fell, as a drop in oil prices hit chem­i­cal and en­ergy firm Sa­sol.

The JSE Top40 in­dex was down 0.82 per­cent to 43 891.49 points while the broader all share fell 0.79 per­cent to 49 074.09 points.

Sa­sol was the big­gest de­cliner, sit­ting at the bot­tom of both in­dices, down 26.44 per­cent to end the day at R52.72.

Oil prices fell yes­ter­day af­ter Saudi Ara­bia and the United Arab Emi­rates an­nounced plans to boost pro­duc­tion ca­pac­ity and Opec and the US En­ergy In­for­ma­tion Ad­min­is­tra­tion cut oil de­mand fore­casts be­cause of the coro­n­avirus.

In fixed in­come, the yield on the bench­mark 2030 gov­ern­ment is­sue was up 6 ba­sis points to 9.26 per­cent. I Reuters

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