File Image: IOL
JOHANNESBURG - The rand opened stronger yesterday but took a nasty knock from first-quarter gross domestic product (GDP) figures, which showed that the South African economy had contracted by 2.2percent quarter-on-quarter.

Absa head retail investment specialist, Tsitsi Hatendi-Matika, noted that the country’s GDP had been negative in the first quarter for the last three years in a row.

“The rand responded negatively as it weakened from an open of R12.57 to R12.64 (to the dollar) post the announcement.

The R186 benchmark bond also reacted negatively as it weakened 4 basis points from 8.56percent to 8.6percent.”

At 5pm the rand bid at R12.77 to the dollar, 21cents weaker than at the same time on Monday.

Against the pound, the rand was 29c softer at R17.05 and to the euro, the currency eased 21c to R14.91.

Corporate treasury manager at Peregrine Treasury Solutions, Bianca Botes, said muted purchasing manager’s index figures coupled with the contraction in GDP spoke to the difficulties faced by South Africa as an emerging market to create and sustain economic welfare across the board.

“The rand is expected to remain under pressure given weak local fundamentals and conditions in the overall global geopolitical landscape,” said Botes.

The financial stocks index was also hit hard, giving up 1.85percent yesterday in reaction to the rather disappointing figures.

On the equites market, the blue chip JSE Top40 index inched up 0.02percent to 51413.93 points, while the broader all share index dropped 0.16percent to 57779.11 points.

Leading losses among the larger caps were Bidvest, which tanked 5percent to R199.02, followed by Steinhoff Africa Retail, which gave up 4.37percent to R16.62.

Standard Bank sank 3.91percent to R208.15, while Capitec Bank declined 3.6percent to R894.10 and Nedbank gave up 3.39percent to close at R274.94.

Top gainers among bourse heavyweights were Glencore, which added 3.21percent to R66.16 followed by Anglo American, up 2.71percent to R317.94.

BHP Billiton increased 2.2percent to R295.68, Mondi ticked up 2.18percent to R358.85 and Richemont scored 1.93percent growth to end the day at R119.10.