Rand softer as mine uncertainty spreads

THE RAND weakened the most out of 16 major currencies yesterday and bond yields rose as labour unrest in the mining industry spread, undermining investor confidence.

The rand retreated as much as 2.5 percent, its biggest intraday decline since May 30. By 5pm the unit was bid at R8.382 against the dollar, 24.82c weaker than on Tuesday at the same time. Yields on the nation’s 6.75 percent bonds due in March 2021 rose.

Anglo American Platinum said it suspended its Rustenburg operations after unidentified people intimidated workers. The threats follow work stoppages at Lonmin and Gold Fields. About 43 000 people are either on strike at these three firms or staying away from work.

“The market is nervous,” said Guillaume Salomon, a strategist at Société Générale. Further unrest at mines comes as a report on Tuesday showed that the nation’s current account deficit widened to the biggest shortfall in almost four years. “It seems a perfect storm is gathering,” Salomon added.

Platinum futures rallied to a five-month high in New York.

Uncertainty was a “major concern” along with “the current account coming in very negatively”, said Brigid Taylor of Nedbank investment.

The gap on the current account grew to 6.4 percent in the second quarter, the widest since the third quarter of 2008, the Reserve Bank said.