South Africa's rand weakened slightly on Monday in subdued trading with no economic data and investors awaiting President Cyril Ramaphosa's announcement of a new cabinet that will implement his economic reform plans.
At 1645 GMT the rand was 0.23% softer at 14.4350, having drifted in a narrow range for most of the session after reaching 14.3900 in early trade.
Ramaphosa was sworn in as South Africa's president on Saturday, vowing to create jobs and tackle deep-rooted corruption that has strangled economic growth. But analysts say he faces significant resistance from inside his African National Congress party.
Challenges facing Ramaphosa on the economic front were highlighted on Friday by the resignation of Eskom's chief executive, a year after he was appointed to stabilise the power utility and keep the lights on after nationwide blackouts.
Also on Friday, S&P Global Ratings kept South Africa's credit rating unchanged one notch below investment grade.
"The rand has largely ignored the S&P outcome, instead seeing some mild stabilisation over the weekend, after last week's escalations in US protectionism, with the rand weakening," said Investec's chief economist Annabel Bishop. In equities, stocks closed stronger as the broader All-Share index climbed 0.12% to 54,488 points, while the blue-chip Top-40 index rose 0.14% to 48,497 points.
Shares in South Africa's Telkom hit a record high after its full-year results came in better than expected, climbing 13.6% before closing just over 4% stronger at 90.00 rand.
Leading the blue chips was paper and pulp maker Sappi, which gained 2.49% to 54.30 rand. Insurer Discovery climbed 2.23% to 139.80 rand.
Telkom's results caught some investors by surprise, and left those that had bet against the stock scrambling to cover their short positions, Cratos Capital's chief trader Greg Davies said.
"The results don't really justify the share move, but people have to cover short positions, then the share needs to go higher," added Davies.
Bonds weakened, with the yield on the benchmark government bond due in 2026 up 4.5 basis points to 8.405%.
Comments
Comments are closed.