CAPE TOWN – The South African banking stocks sank 2.6 percent to a two-week low the index declines for a fourth day, amid weakness in most emerging-market currencies and as investors assess the potential impact of a strike by bank workers planned for Friday.
Michele Santangelo, a money manager at Independent Securities said global markets did seem to be in a risk-off mode at the moment and hence emerging-market banks were particularly vulnerable.
“The weakness in the rand is also weighing on sentiment towards the banking sector and that, coupled with the upcoming strike in the banking sector is leading to greater selling pressure on the banks,” Bloomberg quoted Santangelo as saying.
The domestic currency weakened 1.1 percent vs dollar to three-week low during intraday trade. At 5pm the rand was bid 17 cents lower at R15.01 to the dollar, 13c lower against the euro at R18.58 and 13c weaker against the pound R16.44, compared with Monday’s 5pm bid.
The looming banking strike in the local market is, however, having a minimal impact, if any, on the domestic currency.