MONEYWEB / 14 MARCH 2018 - 16.00 / PATRICIA ARUO AND MFUNEKO TONYANA
The rand slumped to a one week low on Thursday as a lack of momentum to push the currency beyond a recent milestone and fears of global trade war spurred investors to buy dollars.
At 1440 GMT, the rand was 0.6% weaker at 11.85 having started the day steady around 11.70 before traders began eyeing short dollar positions as New York trade commenced.
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“The rand has been extremely flat. We’ve seen moves mostly between 11.60 and 11.90. Our view is purchasing dollars for anything below 12 rand is a massive discount, considering the fair value is closer to 12.85,” said strategist at Peregrine Treasury Bianca Botes. The rand crossed the threshold of 12 to the dollar on March 2.
The onset of risk off sentiment as investors looked ahead to the US Federal Reserve’s policy meeting next week, where the bank is expected to raise interest rates, saw traders positioning for a greenback rally close rand positions.
The dollar index was up 0.26%.
As a result commodity prices fell, with gold, platinum and copper all down about 0.5%.
In fixed income, the yield for the benchmark government bond due in 2026 rose 5 basis points to 8.125%.
In the equities market, the All Share Index continued to slide, owing to the continued decline in entertainment and technology firm Naspers, which fell 2.05% to R3 465.
The was down 0.38% to 58 203 points. The Top 40 Index weakened for the third straight session, falling 0.34% to 51 613 points.
Cement maker PPC was down 6.59% to R7.23 after it announced on Thursday a R2.1 billion black empowerment top-up scheme that will give employees a 10% shareholding in the South African business.
“BEE (black economic empowerment) deals do mean that some money has to be spent and some restructuring has to happen. That is not always positive in the short-term so often times pressure does come onto the stocks,” said Independent Securities trader, Michele Santangelo.
Information Technology company EOH continued to slid from the previous session after flagging an up to 25% decline in half-year headline earnings per share. It closed 11.76% down to R52.50.
LINK : https://www.moneyweb.co.za/news-fast-news/rand-slumps-as-faltering-rally-revives-12-spectre/
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER