Rand firmer despite Eskom concerns dragging domestic unit
DURBAN – The rand started the week flattish ahead of the Medium-term Budget Policy Statement (MTBPS) at the end of the month, while Eskom concerns provided a drag on the rand opposing some of the positive sentiment generated by recent progress made in the US-China trade negotiations.
Investec group economist Annabel Bishop said that as some positive developments on the expected US-Sino trade deal were seen as mildly supportive of global economic growth, the rand was fairly flattish on Monday.
“The positives in the Integrated Resource Plan (IRP) announced at the end of last week also helped the domestic currency strengthen meaningfully, as well the fact that as some, if future planned, progress is being seen to be made in the face of South Africa’s energy crisis,” said Bishop.
The currency ranged between R14.74 - R14.81 against the dollar on Monday.
At 5pm the domestic currency was bid 4c stronger than the same time bid on Friday at R14.80 against the dollar. Against the pound it was 10c weaker at R19.21 and bid at R16.48 to the euro.
Bishop said that the marked weakness in the domestic currency in the first half of last week came as load shedding was reinstituted in South Africa at a time when global and domestic economic growth concerns centred around fears of further slowdown in economies, if not worse.
She said South Africa was a small open economy and is significantly impacted by global growth.
Nedbank CIB research analyst Reezwana Sumad said the markets on the day were confined to limited trading ranges, with local concerns around the Eskom situation and internationally, awaiting Parliament’s decision regarding Brexit. “Since the time of the close, the rand has encountered marginal support.”
Meanwhile, JSE stocks grew with the blue-chip Top40 index ascending 0.65 percent to 49834.61points while the broader all share index increased 0.70 percent to 56 110.78 points.
The biggest earners were Capco which gained 8.74 percent at R51.50 followed by Intu Properties with 7.14 percent at R9.60 then Exxaro with 4.62 percent to R125.15. Sappi increased by 4.56 percent at R40.10 while Aspen lifted 3.21 percent to R105.69.
The biggest losers were Trustco which shed 4.56 percent to R8.59 followed by Investec Property dropping 1.59 percent to R14.87 while Vivo Energy decreased by 1.46 percent to R22.96. Harmony also lost 1.45 percent at R46.28 and Spar losing 1.27 percent to R190.