File image: IOL
File image: IOL

South African rand weakened by economic data

By Mfuneko Toyana and Naledi Mashishi Time of article published Dec 6, 2019

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CAPE TOWN - South Africa’s rand was weaker on Thursday on lingering ecomnomic weakness highlighted by the country’s current account deficit and business confidence data.

By 17:45 on Thursday, the rand was down 0.6% at 14.6820 per dollar from an overnight close of 14.6020.

Data from the central bank on Thursday showed the country’s current account deficit has narrowed slightly but less than expected, while a measure of monthly business confidence showed businesses are still struggling with the tough economic climate and slack demand.

Earlier in the week, a reading from the statistics agency showed the economy shrank 0.6% in the third quarter, raising concerns that the country could lose its last investment-grade credit rating from Moody’s.

In equities, the benchmark JSE Top-40 Index slipped 0.5% to 48,589.71 points while the broader All-Share Index was down 0.4% at 54,779.76 points.

“You’ve got this mood of uncertainty still as to how things are going to be fixed with (power company) Eskom and what could be done to get the economy kick-started,” said Ferdi Heyneke, portfolio manager at Afrifocus Securities.

Eskom implemented further power cuts on Thursday after a number of generating units broke down.

Services, trading, and distribution group Bidvest dropped 2.2% to 192.70 rand while retailer Mr Price Group declined 1.9% to 179.60 rand.

Preventing further losses were resource shares, with platinum miner Impala up 3.8%. Gold Fields rose 3.1%, helped partly by stronger gold prices.

Bonds were broadly flat, with the yield on the benchmark 2026 bond at 8.43%.

REUTERS

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