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South Africa’s rand at 2-week low as global headwinds, Fed jitters kick-in

Comments (0) Actualites, Africa, Business, Economy, Politics, US

JOHANNESBURG (Reuters) – South Africa’s rand slipped to its lowest in two weeks on Thursday, succumbing to month end demand for dollars by local firms as the increasing chances of higher interest rates in the United States lured bulls back into long-dollar positions.

At 0640 GMT the rand was 0.4 percent weaker at 11.8350 per dollar, its softest level since February 14, compared to an overnight close of 11.7875.

It was the first time in more than two weeks the rand closed above technical support around 11.80, after weakening for three consecutive sessions, prompting some technical selling as well as portfolio rebalancing by corporates offloading excess rands.

Analysts said the “Ramaphosa effect”, named for the rise in investor confidence and rally in local assets after new president Cyril Ramaphosa took over as chief of the ruling African National Congress (ANC) in December, was now giving way to global headwinds.

“With the cabinet reshuffle out of the way, our local assets will continue to reprice in line with the global macro environment,” said fixed income trader at Rand Merchant Bank Gordon Kerr in a note.

The dollar index remained near 5-week highs early on Thursday, still drawing support after the Federal Reserve’s new chief Jerome Powell struck an optimistic tone on the U.S. economy, raising bets of at least four rate hikes by the bank in 2018.

Stocks opened softer with the benchmark Top-40 index down 0.13 percent.

Bonds were also softer, with the yield on the benchmark paper due in 2026 up 4 basis points to 8.165 percent.


(Reporting by Mfuneko Toyana; Editing by Ed Stoddard)


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Sibanye-Stillwater falls into annual loss, closes dividend tap

Comments (0) Actualites, Africa, Business, Economy, Health, Mining

JOHANNESBURG (Reuters) – South African-based gold and platinum producer Sibanye-Stillwater reported an attributable loss for 2017 and in a bid to preserve cash turned off the dividend flow that has made it a darling of investors

Sibanye’s share price fell 5 percent, underscoring disappointment among investors who have grown accustomed to hefty dividend payouts from the Gold Fields spin-off.

The company’s operations, including the troubled Rustenburg assets it acquired from Anglo American Platinum, delivered solid results, with the loss stemming from impairments, provisions for occupational healthcare claims, and restructuring and transaction costs among other factors.

Sibanye-Stillwater reported an attributable loss of 4.437 billion rand ($333 million) for the year ended 31 December 2017, compared with attributable earnings of 3.473 billion rand ($237 million) for the year ended 31 December 2016.

“In the near term, cash preservation is prudent and as a result no final dividend is being declared,” the company, which has given over 4 billion rand back to shareholders since 2013, said.

Sibanye initially positioned itself as a dividend play with cash flowing from mature South African gold assets that did not require huge investment, but it has been expanding into platinum and beyond South Africa, diverting its dividend flow.

Its dividend yield is now 2.882 percent, almost the same as the 2.84 percent for Johannesburg’s All-share index.

The healthcare provision has been put aside for an expected settlement in a class-action suit against six current and previous South African gold producers related to a fatal lung disease. This also hit AngloGold Ashanti’s earnings.

It was launched almost six years ago on behalf of miners suffering from silicosis, a fatal lung disease contacted by inhaling silica dust in gold mines, and is expected to be settled in a few months.

Overall, Sibanye’s operational performance was good, suggesting it will return to profits and dividends.

The company said its labour-intensive Rustenburg platinum operations west of Johannesburg – which under Amplats were loss-making and flashpoints of violent labour unrest – contributed 1.6 billion rand or 18 percent to group adjusted EBITDA.

“The Rustenburg operations have consistently delivered solid production and improved financial results, with approximately 1 billion rand in cost savings and synergies realised in the first year of incorporation, well ahead of initial expectations of 800 million rand over three to four years,” the company said.

“This is a remarkable result from assets which, before being part of the Sibanye-Stillwater Group, had been delivering significant and sustained losses for many years,” said chief executive Neal Froneman.


(Reporting by Ed Stoddard; Editing by Tiisetso Motsoeneng and Adrian Croft)

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South Africa’s rand clings on to gains despite downgrade fallout

Comments (0) Economy, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s rand edged firmer on Wednesday, clinging on to recent gains despite continued fallout triggered by a Moody’s ratings downgrade last week and an anticipated interest rate hike by the U.S. Federal Reserve.

At 0640 GMT, the rand traded 0.2 percent firmer at 12.7350 per dollar compared to close of 12.7600 overnight in New York, bringing weekly gains to around 1.3 percent.

Following a one notch downgrade to its lowest sovereign investment grade on Friday, Moody’s cut the ratings of a dozen banks and companies including embattled power utility Eskom, further shaking confidence in Africa’s most advanced economy.

Quarterly business confidence and April retail sales due in the session are expected to shed more light on ailing economy. Growth shrunk 0.7 percent in Q1 2017 after a 0.3 percent contraction in Q4 of 2016.

Traders expect the U.S. central bank to increase interest rates by a notch when it concludes a policy meeting on Thursday, a move that could dampen demand for high-yielding emerging market assets.

South African bonds were flat, with the yield on benchmark 2026 government bond inching up 0.5 basis points to at 8.445 percent.

Stocks set to open higher at 0700 GMT, with the JSE securities exchange’s Top-40 futures index up 0.3 percent.


(Reporting by Mfuneko Toyana; Editing by Ed Cropley)


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South Africa’s rand bounces as emerging markets shake off Turkey coup worries

Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s rand gained nearly two percent early on Monday as emerging markets set aside concerns about a failed coup in Turkey over the weekend and investor focus shifting back to the timing of rate hike in the United States.

* Rand at 14.2900 at 0645 GMT, 1.85 percent firmer than New York close. The rand trended firmer for most of the previous week as investors globally favoured high yield assets.

* Risk appetite could drop later in week after strong economic data from United States suggest higher interest rates soon.

* Stocks due to open flat at 0700 GMT, futures index up 0.11 percent.

* Government bonds softer, yields up 4 basis points to 8.77 percent.


(Reporting by Mfuneko Toyana; Editing by Ed Cropley)

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South African rand pulls back on domestic growth worries

Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s rand retreated from 10-week highs against the dollar on Wednesday, as nagging worries about domestic growth offset the boost from a generally risk-on global environment.

Stocks were set to open a touch firmer, with the Top-40 futures index of the JSE securities exchange edging up 0.3 percent.

The rand traded at 14.4225 to the greenback by 0859 GMT, down 0.57 percent from Tuesday’s close at 14.3410.

The currency had climbed to 14.2755 on Tuesday, its strongest since May 3, partly buoyed by a surprise jump in local manufacturing output.

The outlook for the economy, however, still remains downbeat, raising the risk of credit rating cuts before the end of the year. The IMF has cut its growth forecast for 2016 to 0.1 percent from the 0.6 percent predicted in May.

South African government bonds also dipped on Wednesday, and the yield for debt due in 2026 added 1.5 basis points to 8.675 percent.


(Reporting by Stella Mapenzauswa; Editing by Toby Chopra)

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South Africa’s Sibanye Gold to cut jobs at loss-making Cooke 4 mine

Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s Sibanye Gold has began talks with unions for job cuts at its Cooke 4 mine after failing to stem heavy losses at the operation.

The company first broached the subject of job cuts at the mine with unions in November 2014. Since then Cooke 4 has continued to fall short of production targets and accumulate losses forcing the producer to re-open talks, the company said.

The chief executive of Sibanye’s Gold operations, Wayne Robinson, said in a statement the losses at the mine threatened the viability of the other three Cooke operations.

“It is unfortunate that despite the joint efforts of stakeholders, the Cooke 4 operations have been unable to meet required production and cost targets and has continued to operate at a loss,” said Robinson.

The Cooke operations, including four mines and three processing plants, had an operating loss of 4 million rand ($274,000) in 2015, the company said.

Job cuts are a thorny issue in Africa’s most industrialised country where the unemployment rate is near 27 percent, a big concern for companies faced with labour disputes. Unions were unavailable to comment but have opposed job cuts elsewhere.

Sibanye spokesman James Wellsted said the previous round of negotiations in November had led to some job cuts and a new plan to revamp the mine but the operation continued losing money.

He said the mine was unlikely to run with fewer people if it was unable to pay for itself.

“I don’t want to preempt the consultation process and obviously we are looking for solutions but we have not been able to improve the situation,” Wellsted said when asked whether the mine would be shut.

Sibanye employs 1,700 workers at Cooke 4 and about 7,000 workers at all its four Cooke operations, he said.

($1 = 14.6182 rand)


(By Zandi Shabalala. Editing by James Macharia)

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South Africa’s rand steady, stocks to open higher

Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s rand held its ground early on Monday and was seen getting a boost from improved risk appetite as investors search for higher yields on expectations interest rates will stay low in leading economies.

At 0630 GMT, the rand traded at 14.5825 per dollar, not far off its New York close of 14.5750 on Friday.

“The much-stronger-than-expected (U.S.) payrolls figure has not hurt global risk appetite or the rand. The market has taken the figure as confirmation that the US economy is not slowing down but not so strong that the Fed will have to hike” Rand Merchant Bank analyst John Cairns said in a note.

“A rate cut from the Bank of England on Thursday would further encourage risk-taking.”

Several U.S. Federal Reserve officials are scheduled to speak this week, offering plenty of opportunities for the market to glean clues about policy.

Stocks were set to open higher at 0700 GMT, with the JSE securities exchange’s Top-40 futures index up more than 1 percent.

In fixed income, the yield for the benchmark instrument due in 2026 dipped 2 basis points to 8.685 percent.


(Reporting by Olivia Kumwenda-Mtambo; Editing by Andrew Heavens)

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