Rand weaker as blackouts begin
THE RAND was weaker yesterday after disappointing mining data and as struggling state power firm Eskom started controlled electricity outages, because of a wage dispute with labour unions. At 5pm the rand was bid at R13.3291 to the dollar. – Reuters
THE RAND was weaker yesterday after disappointing mining data and as struggling state power firm Eskom started controlled electricity outages because of a wage dispute with labour unions.
At 6.35pm, the rand traded at R13.37 to the dollar, 0.5 percent weaker and not far from a sixmonth low of R13.44 struck on Wednesday.
At 5pm the rand had bid at R13.3291 to the dollar, 9.08 cents softer than at the same time on Wednesday.
South African assets have been hurt recently by weak economic figures and an unfavourable external backdrop which has seen global investors pull back from emerging markets.
Data showing that mining output fell 4.3 percent in April came after same month retail sales undershot expectations and first-quarter gross domestic product contracted by 2.2 percent.
These data points have added to evidence that the economy is yet to pick up momentum following Cyril Ramaphosa’s takeover of the presidency in February.
Ramaphosa has courted investors with promises to woo investment and root out corruption, but he faces an uphill battle to get the economy firing on all cylinders after a decade of stagnation under his predecessor, Jacob Zuma.
That task became harder yesterday, when Eskom – which produces more than 90 percent of the country’s power – started controlled outages as protesting union members disrupted coal supplies and blocked some staff from going to work.
Labour unions have threatened a total shutdown of Eskom’s operations unless it meets their demands for a 15 percent increase in salaries.
The last time Eskom had to resort to controlled power outages in 2015, economic output was affected.
Meanwhile, stocks were mixed yesterday, with bourse heavyweight Naspers under pressure while banks were in demand.
The JSE Top40 index edged down 0.04 percent to 52 178.24 points, while the broader all share index inched up 0.1 percent to 58 495.67 points.
Naspers dropped 1.71 percent to close at R3 335.
FirstRand gained 3.47 percent to R63.22, while Barclays Africa
Group rose 1.82 percent to R165.68.