Zim mulls legalising production of cannabis to lure investment
Reuters (File photo) / A shopkeeper counts out change above her cash box at her shop in Hillcrest, west of Durban, South Africa, January 11, 2016.
South Africa’s rand slipped to three-week lows against the dollar on Thursday, erasing most of the previous session’s gains in a cautious market as a vote on a motion of no-confidence against President Jacob Zuma drew closer.
Stocks inched past a new all-time peak, buoyed by British American Tobacco.
The Zuma administration has been beset by scandals and criticised for failing to address serious economic problems, with the president surviving eight motions of no-confidence since taking office in 2009.
If the current motion, scheduled for August 8, succeeds Zuma and his entire cabinet would have to step down.
Speaker Baleka Mbete, who will decide whether to allow a secret ballot that could be more likely to oust Zuma, said on Thursday she would “do the right thing”.
“We still wait for the Speaker of Parliament to announce her decision on the secret ballot,” Rand Merchant Bank analyst Isaah Mhlanga said, adding market focus was also on U.S. non-farm payrolls data due on Friday.
At 1523 GMT, the rand traded at 13.3850 per dollar, 1.4 percent weaker than its New York close on Wednesday.
The currency, which is trading at its weakest levels since July 12, fell early this week on fears of a third credit agency downgrade to “junk” ahead of review by Moody’s on Aug. 11.
In fixed income, the yield for the benchmark government bond due in 2026 rose 3.5 basis points to 8.65 percent.
On the stock market, the All-share index advanced 0.9 percent to a new high of 55,687 in intraday trading, but retreated slightly to close on 55,685. The benchmark Top-40 index was up 0.9 percent at 49,243 points.
British American Tobacco, which has a secondary listing on the JSE, recovered some of the past week’s losses after JP Morgan said it sees excessive concerns about regulation in the U.S. as a buying opportunity.
Last Friday, shares of major tobacco companies in the U.S. and UK fell sharply after a proposal by the head of the U.S. Food and Drug Administration to cut nicotine in cigarettes.
British American Tobacco shares on Thursday rose 3.6 percent to 873.50 rand.
MTN was among the losers, shedding 1.8 percent to 117.11 rand, after the company posted a half-year profit which fell short of analyst and investor expectations.
Shares in Mondi were down 2.6 percent to 339.71 rand after the packaging and paper company posted lower half-year profit.Source: Reuters