South Africa’s rand falls after poor current account data, stocks rise

Usama Fayyaz September 6, 2019

JOHANNESBURG: South Africa’s rand weakened on Thursday after data showed the current account deficit widened in the second quarter from the first, dampening positive economic momentum generated on Tuesday by data showing GDP grew more than forecast.

By 1525 GMT the rand was 0.44pc weaker at 14.8700 per dollar, retreating from a four-week high of 14.7400 touched earlier in the session.

The current account deficit was 4pc of gross domestic product (GDP), the South African Reserve Bank said, wider than the average 3pc forecast by economists surveyed by Reuters and than the 2.9pc shortfall in the first three months.

“Intensifying global trade tensions could further depress South Africa’s trade performance in coming quarters and could place added pressure on the current account deficit,” said Elize Kruger, an economist at NKC African Economics.

In equities, the broader All-Share index climbed 1.04pc to 55,476 points, while the blue chips Top-40 index gained 1.11pc to 49,576 points.

South Africa’s biggest insurer Sanlam rose 2.75pc to 73.87 rand after its interim results were bolstered by its pan-African strategy. FirstRand gained 1.67pc to 61 rand after it reported a rise in full-year profits.

“It was a good day, good earnings out,” said Nick Kunze, portfolio manager as Sanlam Private Wealth.

In fixed income, the yield on the benchmark government bond due in 2026, added 3.5 basis points to 8.13pc.

Copyright Reuters, 2019

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