Rand is weaker as Eskom hurts sentiment
JOHANNESBURG - The rand stretched losses early on Tuesday, with sentiment dampened after state power firm Eskom reported a $171 million loss, with emerging market investors looking elsewhere for returns.
At 08:30, the rand was 0.26 percent weaker at 13.4950 per dollar.
After a brief rally at the end of the previous week the currency is back on the ropes, pressured by the patchy domestic growth outlook and ongoing uncertainty about global trade, which has seen investors seek out safety in developed markets.
On Monday Eskom, which supplies more 90 percent of the country’s power and survives on 270 billion rand of state-guaranteed debt, released financial results showing it still remains a major threat to any economic turnaround.
While the rand managed to hold below the 13.50 mark, a recent sell target for investors weary of the currency’s volatile swings, traders said it was likely breach the mark this week.
Bonds were also weaker, with the yield on the benchmark paper due in 2026 up 1 basis point to 8.785 percent.