South Africa's rand weaker on EM sell-off, stocks flat

JOHANNESBURG: South Africa's rand was more than one percent lower on Monday as global emerging markets remained on the back foot, while stocks were flat in tandem with global markets.

At 1613 GMT the rand was 1.12 percent weaker at 14.8550 per dollar, after hitting a low of 14.9400.

Turkey triggered a sell-off in emerging market currencies as risk aversion gripped emerging markets.

Turkey's central bank signalled on Monday it could take action, seen as presaging an interest rate increase at the bank's next meeting on Sept. 13. Analysts said the central bank may have inadvertently set financial markets up for disappointment if it doesn't deliver a hefty increase.

"The Turkish central bank issue puts tremendous strain on emerging markets," said Afrifocus Securities portfolio Manager Cheslyn Francis.

"They have announced an intervention policy, which is still to be seen and not specific," he said, adding the rand could firm if there is a strong intervention.

Bonds were also weaker, with the yield up on the benchmark government debt due in 2026 down 5 basis points to 9,005 percent.

A holiday in the United States muted trading activity in South African markets, analysts said.

On the bourse, the Johannesburg all-share index rose marginally by 0.7 percent to 58,711 points while the blue chip top-40 index was up 0.05 percent to 52,435 points.

"It is the beginning of a new month and we very often get fresh money coming into the fund managers. This could be pushing the market slightly higher but volumes are still thin," said Greg Davies, trader at Cratos Capital.

Hotel and casino group Sun International closed up 7.10 percent after stronger than expected half-year profits.

Weighing on further gains, market heavyweight Naspers  fell 1.86 percent to 2,200 rand as Chinese technology giant Tencent, in which Naspers has a 31 percent stake, extended its losses to 2.12 percent after the government on Friday intensified crackdown on online gaming.