South African rand slips in cautious trade

JOHANNESBURG: South Africa's rand edged lower on Wednesday in cautious trade as investors awaited local and international signals with little to drive a move in either direction.

At 1515 GMT the rand was 0.12pc weaker at 14.5225 per dollar, hardly moved from its overnight close of 14.5050.

The muted activity was reflected in other emerging market currencies, with most units trading sideways amid concerns about a resurgence of coronavirus infections and lower commodity prices.

Soft data on purchasing managers and business sentiment also wobbled the rand's recent rally to a five-week peak.

Private sector activity expanded marginally in March and business sentiment slipped in the same month.

"Given SA's fiscal risks and broader concerns over the COVID-19 pandemic, the market has viewed levels sub-R14.5000/$ as favourable to purchase dollars," said economists at ETM Analytics.

Government bond firmed, with the yield on the instrument due in 2030 falling 7 basis points to 9.325pc.

In the equities market, stocks fell, led by market heavyweight Naspers and technology investment company Prosus NV after it said it will sell a 2pc stake in software group Tencent, worth about $15 billion at current prices, in what could potentially be the biggest block trade on record.

Dutch-based Prosus is majority-owned by Naspers. Its Johannesburg-listed shares fell by 4.12pc, while Naspers declined 5.03pc.

"We expect the news to be viewed cautiously until there is more clarity on how the funds will be redeployed," said analysts from Renaissance Capital in a note.

The Johannesburg All-Share index closed 1.33pc weaker at 67,160 points, while the Top-40 index fell 1.54pc to 61,409 points.