BR100 3,733 Increased By ▲ 63 (1.7%)
BR30 19,153 Increased By ▲ 385 (2.05%)
KSE100 36,142 Increased By ▲ 447 (1.25%)
KSE30 15,676 Increased By ▲ 243 (1.57%)
CASES 240,848 3359
DEATHS 4,983 61
Sindh 99,362 Cases Today
Punjab 84,587 Cases Today
Balochistan 11,052 Cases Today
Islamabad 13,731 Cases Today
KP 29,052 Cases Today

South Africa's rand steadies, stocks down

JOHANNESBURG: South Africa's rand steadied on Tuesday as traders, eschewing big transactions despite poor unemployme

Jul 30 2019

JOHANNESBURG: South Africa's rand steadied on Tuesday as traders, eschewing big transactions despite poor unemployment figures and a warning of another loss from power utility Eskom, stayed on the sidelines ahead of a US monetary policy announcement.  At 1515 GMT, the rand traded at 14.1800 per dollar, not far off Monday's close of 14.1650.

"Surprisingly, the dire (unemployment) number had no effect on the currency as (Wednesday's) anticipated US Federal Reserve interest rate cut overshadows local market events for the time being," said Bianca Botes, a treasury partner at Peregrine Treasury Solutions.

The unemployment rate jumped to its highest since the global financial crisis more than a decade ago, piling more pressure on President Cyril Ramaphosa's pledge to turn around a shrinking economy.

Meanwhile, power utility Eskom said it expected to make a loss of around 20 billion rand ($1.4 billion) in the 2019/20 financial year, a similar loss to the previous year due to a steep increase in debt-servicing and fuel costs.

Rating agencies Fitch and Moody's last week both warned about fiscal pressure on South Africa and highlighted Eskom as a risk, pressuring the rand.

Equities closed weaker with the Johannesburg Stock Exchange's all-share index down 1.37% to 57,242 points, while the Top-40 index fell 1.48% to 51,207 points.

Leading the declines was South African retailer Massmart which fell almost 20% before closing down 15.45% at 49.80 rand per share after it warned half-year operating profits would hit a 13-year low.

South Africa's second biggest insurer Old Mutual fell 5.55% to 19.24 rand after the High Court ruled its dismissal of former CEO Peter Moyo was unlawful.

On the upside, Africa's biggest retailer Shoprite closed up 5.75% at 157.22 rand after it forecast performance would improve in the second half.

In fixed income, the yield on the benchmark government bond due in 2026 edged down to 8.31%.

Copyright Reuters, 2019