JOHANNESBURG - The rout at the Johannesburg Stock Exchange (JSE) continued on Monday as stocks tumbled when the markets opened after the South African government imposed a travel ban on foreign travellers from high-risk countries due to the coronavirus (Covid-19).
President Cyril Ramaphosa on Sunday declared a national state of disaster and announced mandatory testing, self-isolation or quarantine for South African nationals returning from affected countries in a bid to the spread of the Covid-19.
Finance Minister Tito Mboweni said the National Treasury has a coordinating working group to deal with the financial impact of the Covid-19 outbreak.
“We stand ready to do things. Funds from the National Disaster Fund are available,” He said.
“Government departments may have to reduce some programmes to divert funds to the Covid-19 response.”
Trading reacted negatively as the JSE All Share Index was 9.67 percent down to 39 904 points at 11h30, while the JSE Top40 Index fell by 9.83 percent to 35 596 points as investors are fleeing risk assets.
The rand traded 2.64 percent weaker on Monday morning to R16.71 against the dollar, and is expected to drop further in the upcoming weeks as Covid-19 panic sets in.
Economists expect that the SA Reserve Bank will have to cut interest rates on Thursday following over 40 central banks that have done so since the beginning of 2020.
The JSE wiped off billions of rand as stocks were trailing the worst trade in a single day in 30 years following last week's Thursday's plunge.
South African markets closed in the red on Friday, pulled down by losses in banking sector stocks.
Leading the rout on Monday was the banking group Investec Limited whose share price was down 39.45 percent to R39.35 while Investec Plc share price fell 38.67 to R39.60.
The banks index was 11.28 percent lower to 6 028 points on Monday while the gold stocks fell 10.56 percent to 2 289 points, platinum was 14.16 percent down to 36.38 points, and resources were 8.61 percent lower to 2 340 points.
Retailers Massmart Holdings, Foschini Group and Shoprite Holdings lost 3.3 percent, 1.3 percent and 0.1 percent, respectively.
Petrochemicals group Sasol also continued experiencing losses from last week’s oil price crash, falling 23.02 percent to R39.09 on Monday.
Sasol had earlier announced that it would accelerate its assets disposal program and consider a rights issue.
Brent spot prices fell 3.3 percent to trade at $32.43 per barrel, reversing previous session gains, even as the US Federal Reserve (Fed) slashed interest rates over the weekend in its second emergency cut this month and stated that it would expand its balance sheet by at least $700 billion.
On Friday, Brent spot prices had jumped 7.4 percent to settle at $33.55 per barrel after the US and other nations signaled plans to support weakening economies.