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South Africa’s rand weakens on Zuma showdown, stocks open flat

18 March 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s rand weakened against the dollar early on Friday as investors turned focus to a political scandal that has jolted President Jacob Zuma’s government and a potential sovereign ratings downgrade.

At 0702 GMT, the rand traded at 15.2400 per dollar dollar, 0.46 percent weaker from Thursday’s New York close of 15.1700.

The currency had rallied more than 3 percent to its strongest in more than a week on Thursday after the central bank hiked interest rates.

“Factors to consider are any news on the political front, over the long weekend the ANC (African National Congress) is holding its NEC (National Executive Committee) Lekgotla and we await any news from Moody’s who are currently in South Africa,” Nedbank analysts said in a note, referring to a meeting of the top brass of the ruling party.

Analysts from Moody’s credit rating agency were due to complete their three-day visit to South Africa on Friday after putting its Baa2 rating on review, according to the Treasury.

Investors fear further political uncertainty could hasten a downgrade, with Fitch and Standard & Poor’s already rating the country just one step above junk status.

The government has been jolted this week by suggestions that a wealthy family with close ties to Zuma may have been behind his decision to sack the country’s respected finance minister Nhlanhla Nene in December.

Zuma, who is due to hold a three-day meeting with top ANC officials from Friday, has denied being influenced by anyone in the appointment of cabinet ministers.

On the stock market, the benchmark Top-40 index was flat in early trade, sliding 0.02 percent.

In fixed income, the yield for the benchmark instrument due in 2026 down 3 basis points to 9.145 percent.

 

(Reporting by Olivia Kumwenda-Mtambo; Editing by James Macharia)

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S.African rand slides as appetite for emerging assets wanes, stocks rise

14 March 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s rand fell against the dollar as appetite for emerging assets was dented by a firming dollar in cautious trade ahead of the interest rate decision on Thursday.

By 0925 GMT the rand had slipped 0.82 percent to 15.3475 per dollar, reversing a run that took the currency towards 15.00, a level it has not breached in nearly three months.

Measured against a basket of major currencies, the greenback was 0.2 percent firmer.

With a dearth of data due in the session traders expect direction later in the week from the local release of an interest rate decision on Thursday.

“You have the FOMC and then the local interest rate decision. And in the trading world we’re limited to the scenarios we have on hand,” said trader at WWC Securities Marten Banninga.

“If you look at some of the forecasts its looks like its 50/50,” Banninga said.

A Reuters poll of 30 economists expects the South African Reserve Bank (SARB) to leave its benchmark lending rate at 6.75 percent after hiking by 50 basis points in January, despite rapidly rising inflation.

A rates decision on Wednesday by the United States central bank is also set to determine emerging market flows as investors look for clues on the pace of rate hikes in the world’s top economy.

Bonds were also weaker, with the government paper due in 2026 adding 1 basis point to 9.125 percent.

Stocks were higher, with the JSE securities exchange’s Top-40 up 1.5 percent to 46,464 points.

 

(Reporting by Mfuneko Toyana; Editing by James Macharia)

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South Africa’s rand firms to 2-1/2-month high after ECB cuts rates

10 March 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s rand rallied to its firmest since December in afternoon trade on Thursday after the European Central bank cut interest rates and stepped up its stimulus program.

By 1305 GMT the rand had firmed 1.12 percent to 15.0300 per dollar, its strongest level since Dec. 21.

“This means there is more cheap money going around and the risky assets are loving it,” said chief currency at Bidvest Bank Ion de Vleeschauwer.

 

(Reporting by Mfuneko Toyana; Editing by Tiisetso Motsoeneng)

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South African rand recovers as Zuma says not at war with finmin

29 February 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s rand firmed against the dollar on Monday after President Jacob Zuma said he was not at war with Finance Minister Pravin Gordhan, following media reports of a fallout.

The currency fell nearly 4 percent on Friday, its biggest daily loss since 2011, after Gordhan said there were attempts to discredit him and the integrity of the Treasury.

Gordhan’s statement followed a newspaper report which quoted sources as saying he had threatened to resign after receiving a letter from the elite Hawks police unit questioning his knowledge of a suspected rogue unit at the revenue service.

This followed media reports of a clash between Gordhan and the head of the South African Revenue Service (SARS).

The Hawks also said they were not investigating Gordhan, and there was no case against the minister.

“The media has incorrectly reported, among other things, that there is a war at SARS and that the President and the Minister of Finance are somehow at war. This is a total fabrication and mischievous sensationalism,” the presidency said in a statement.

“The President wishes to emphasise that Minister Gordhan remains the Minister of Finance and any positing that the position of the Minister is under any threat is dismissed with the contempt it deserves.”

As of 1344 GMT, the rand had firmed 1.45 percent to 15.9260 versus the dollar from Friday’s close of 16.1600.

Government bonds also recovered. The yield on the benchmark instrument due in 2026, which soared as much as 28 basis points in early trade, was up 4.5 basis points to 9.41 percent as of 1434 GMT.

“It is a case of correction following knee jerk selling on Friday. The markets will continue to keep a close eye on narrative and look for further confirmation Gordhan will be allowed to do his job,” NKC African Economics economist Bart Stemmet said.

On the stock market, both the Top-40 index and the broader All-share were largely unchanged.

Barclays Africa Group Ltd fell as much 6 percent when the market opened, and traded 5 percent lower after Barclays Plc said on Sunday its board was evaluating strategic options in relation to its shareholding in its African business.

($1 = 16.0379 rand)

 

(By Olivia Kumwenda-Mtambo. Additional reporting by Stella Mapenzauswa and Nqobile Dludla; Writing by James Macharia, editing by Ed Osmond)

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South Africa’s rand slides as President’s speech disappoints

12 February 2016 Comments (0) Africa, Latest Updates from Reuters, Politics

JOHANNESBURG (Reuters) – South Africa’s rand weakened on Friday after President Jacob Zuma’s state-of-the-nation address that analysts and economists said did not deal with concerns raised by rating agencies.

By 0645 GMT the rand had slipped 0.7 percent to 15.9100 per dollar, pushed lower by the president’s failure to address investor worries over fiscal policy as well weak mining and manufacturing data.

Bonds also weakened, with the benchmark paper due in 2026 adding 7 basis points to 9.24 percent.

“There was only limited recognition of the current economic malaise with an overplaying of success of past policy targets,” said Peter Attard Montalto, head economist for emerging markets at Nomura International.

Analysts said ratings agencies were keen to hear the president announce a clear plan detailing how South Africa would improve economic growth, predicted at only 0.9 percent in 2016 by the central bank.

On Thursday, data from the statistics agency showed mining production declined 0.3 percent in December, while manufacturing grew slightly in the same month.

“The impact of the commodity price rout has been disastrous for domestic mining industry,” analysts at NKC African Economics said in a note.

“Unfortunately, new Mineral Resources Minister Mosebenzi Zwane offered little in the way of viable relief strategies when he addressed Mining Indaba earlier this week.”

Stocks opened higher, with the JSE Top-40 blue-chip index adding 0.65 percent to 42,324 points in early trade.

 

(Reporting by Mfuneko Toyana; Editing by Biju Dwarakanath)

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South Africa’s rand flat ahead of U.S. jobs data

5 February 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s rand weakened slightly early on Friday, pausing a rally that has seen the unit trade below the crucial 16 rand per dollar mark for three straight sessions as global risk appetite has improved.

Stocks were set to open flat at 0700 GMT, with the JSE securities exchange’s Top-40 futures index slipping 0.1 percent.

By 0645 the rand was flat at 15.8995 per dollar, easing off its firmest level in one month after statements from the United States Federal Reserve this week suggested interest rates there would remain lower for longer.

Government bonds were also firmer, with the benchmark paper due in 2026 shedding 2 basis points to 9.115 percent.

Traders said currency moves would be limited ahead of the U.S. non-farm payrolls data due later in the session.

“Markets are still deciding on a consensus view for how many U.S. rate hikes we will see this year, and a weak jobs report could put the impetus back in the hands of doves,” said research house NKC African Economics in a note.

Recently weak U.S. economic data, and dovish comments from New York Federal Reserve President William Dudley, have led investors to pare bets on a steady pace of Fed rate increases.

 

(Reporting by Mfuneko Toyana; Editing by Ed Stoddard)

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South Africa’s rand firmer, but will struggle to sustain gains

27 January 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s rand was a tad firmer against the dollar on Wednesday, in a market anticipating an interest rate hike as the central bank fights inflation pressures.

But analysts said the rand was not likely to gain on a sustainable basis, being at the mercy of general risk aversion as investors worry about the impact of slowing growth in China.

At 0651 GMT the rand was trading at 16.4050 versus the dollar, up 0.09 percent compared with where it ended Tuesday trade.

Just one month into 2016, the local currency has already weakened nearly 6 percent against the greenback, dragged down by concerns over sluggish domestic growth and a slowdown in the world’s second biggest economy.

“Aside from domestic factors, the rand will continue to be vulnerable until markets in China calm down,” NKC African Economics said in a note outlining short-term risks to the domestic currency.

“Higher local interest rates will not remedy this situation even if the central bank hikes significantly in the first quarter of 2016 as the rand remains at the mercy of broader emerging market sentiment.”

South African stocks looked likely to start slightly firmer, with the Top-40 futures index ALSIH6 up 0.36 percent prior to the start of trade at 0700 GMT.

On the debt market, the yield for the 2026 benchmark government bond eased 2 basis points to 9.635 percent.

 

(Reporting by Stella Mapenzauswa; Editing by Ed Stoddard)

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South African rand still fragile after sharp fall at start of week

12 January 2016 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South Africa’s rand remained on shaky ground against the dollar on Tuesday after tumbling as much as 9 percent in the previous session over concerns about both the Chinese and local economies.

The JSE securities exchange’s Top-40 futures index was down 0.97 percent, suggesting the local bourse would open more than 420 points lower at 0700 GMT.

At 0653 GMT, the rand traded 0.51 percent softer at 16.8850 per dollar compared with Monday’s close.

The rand had fallen to a record 17.9950 during Asian trade on Monday, on fears that China wants to weaken its currency aggressively and boost its export competitiveness.

It fared worse than most of its emerging market peers, reflecting additional concerns about the direction of policy in Africa’s most advanced but struggling economy after President Jacob Zuma inexplicably fired the finance minister in December.

“One can only hope that in the shorter term, the market has become a little stretched from all this negativity so far this year and that we get a bit of a relief rally,” Standard Bank trader Warrick Butler said.

In fixed income, the yield for the benchmark government bond maturing in 2026 added 5.5 basis points to 9.74 percent compared to Monday’s close. It was however still far off the previous session’s four-week high of 9.89 percent.

 

(Reporting by Stella Mapenzauswa; Editing by Anand Basu)

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Rand gains, but South African and Chinese economies pose risks

8 January 2016 Comments (0) Non classé

JOHANNESBURG (Reuters) – South Africa’s rand recovered against the dollar on Friday after hitting record lows in the previous session, but remained vulnerable to concerns about the local economy and that of China.

The rand rose a few cents after central bank data showed South Africa’s net gold and foreign exchange reserves were up slightly at $40.654 billion in December.

At 0704 GMT, the rand traded at 15.9400 to the greenback, a 0.9 percent gain over Thursday’s close at 16.0850.

The local currency had slid to a record low of 16.2015 as renewed concerns about China’s economy spurred an emerging markets sell-off.

The rand shed a quarter of its value against the greenback last year, undermined by worries about weak domestic growth and a global aversion to emerging markets as investors braced for the advent of policy tightening in the United States.

“With U.S. jobs data looming and the situation in China still perilous, respite (for the rand) will likely only be temporary,” NKC African Economics said in a note.

On the South African bourse, the Top-40 index added 0.7 percent while the broader all-share was up 0.56 percent after each dropped more than 2 percent on Thursday.

Government bonds also recovered, and the yield for the benchmark maturing in 2026 retreated 4 basis points to 9.575 percent.

 

(Reporting by Stella Mapenzauswa; Editing by Dominic Evans)

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Bargain buying lifts South Africa’s stocks, rand weak

22 December 2015 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South African stocks rose to a more than two-week high on Tuesday, bolstered by bargain hunters and a recovery in oil prices from its lowest level in more than a decade, while the rand dipped in holiday-thinned trade.

The benchmark Top-40 index rose 1.2 percent to 44,900.59, while the broader All-Share index rose by the same margin to 49,780.33.

“What we are seeing is a bit of buying before the close of the quarter,” said Sanlam Private Investments’ portfolio manager David Peacock. “Some stocks were oversold, so now we are seeing some nibbling [back].”

A recovery in oil prices from 11-year lows as investors unwounded some of their bearish bets on the battered commodity also helped boost stocks such as petrochemicals company Sasol, which rose by 2.61 percent to 393 rand.

Other gainers included Africa’s largest mobile operator MTN, which gained 4.53 percent to 141.16 rand, while its rival, Vodacom added 2.34 percent to 151.72 rand.

Among the losers was Tiger Brands, which fell 1.81 percent to 318.00 rand.

Trade was light, with 153 million shares changing hands on the stock market, according to preliminary bourse data, well below the average of 183 million shares.

On the forex market, the rand weakened in shallow, range-bound trade following its brief relief rally ahead of the holiday season.

Trade is expected to be subdued for the remainder of the year as most domestic market players are on holiday, and with no major economic news to provide direction for the rand.

By 1523 GMT the rand had weakened 0.49 percent to 15.1700 per dollar compared to 15.1030, where it closed overnight in New York.

“We expect the rand to hover around R15/$ for the rest of the year,” said NKC African Economics analyst Bart Stemmet. “We see risks to the rand at its current levels to be balanced.”

Government bonds were weaker, with the benchmark paper due in 2026 adding 9 basis points to 9.445 percent.

 

(Reporting by Nqobile Dludla and Thekiso Lefifi; Editing by Ed Stoddard)

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