Photo: File
Photo: File

Rand retains momentum on the back of the US election

By Dhivana Rajgopaul Time of article published Nov 9, 2020

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JOHANNESBURG - The South African rand retained positive momentum on the back of external factors –a Biden presidency – as US elections continued to dominate global headlines.

In local news, administrators for state carrier SAA indicated that debt to aircraft lessors and “some creditors” are not covered by the R10.5bn ($665m) bailout (which only covered “initial commitments”) laid out in the ‘mini-budget’ presented in October, spurring concerns that the embattled parastatal will knock on government’s door for yet another hand-out in the short term.

Reuters quoted administrators as warning that around R1.7bn is owed to lessors and R600m to creditors “from before [SAA] went into administration” (almost one year ago).

Reuters further cited Kgathatso Tlhakudi, director-general of the ministry responsible for SAA, as stating that government “would pay the amounts to lessors and longstanding creditors but that it was still working on a solution.”

This came as Public Enterprises Minister Pravin Gordhan announced this week that “the ultimate aim is to remove the burden ... from our shoulders" as government is contemplating partnership deals with potential investors; this process will however be hindered by a burden of unpaid debt. SAA failed to return profit since 2011.

The local unit traded firmer overnight. Expected range today R15.30/$ - R15.60/$.

South African bourse

The JSE All Share (0.88 percent) ended higher on Friday led by gains in large technology (+3.54 percent) stocks. In the overall emerging market sphere, the MSCI Emerging Market Index (+1.26 percent) traded stronger.

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