Rand falls to 1-month low, stocks up

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Rand falls to 1-month low, stocks up

7:58 CAT | 19 Sep 2017

The rand dipped to its weakest level in a month on Monday, with a slide by emerging market currencies against the stronger dollar made worse by a fresh wave of political concerns locally.

Stocks rose, led by Discovery reporting a rise in full year profits

At 1500 GMT the rand had weakened 0.9% to 13.28 per dollar, its softest level since August 18, having closed at 13.16 in New York on Friday.

On the day, the greenback stretched its rally from the previous week as expectations swelled that the Federal Reserve would begin paring its massive bond buying programme and deliver another interest rate increase before year-end.

“It’s not just the rand that’s on the back foot, there’s pressure on EM’s generally,” said Halen Bothma, analyst at ETM.

The rand was also affected by domestic political factors.

On Friday the chairman of South Africa’s state nuclear agency said the government could restart a procurement process for its nuclear expansion project as soon as next month.

The South African Revenue Service (Sars) on Monday accused KPMG of “unlawful” behaviour and threatened a legal suit against the auditor for withdrawing a report that suggested the former finance minister Pravin Gordhan helped run a rogue unit to spy on political leaders.

President Jacob Zuma sacked Gordhan in March.

“Politics is definitely a driver of some of the bearish sentiment on the rand. The possible nuclear deal and the stories out of Sars today are concerning,” Bothma said.

In fixed income, bonds weakened with the yield on the benchmark paper due in 2026 adding 1.5 basis points to 8.41%.

On the bourse, the benchmark Top 40 Index rose 0.94% to 49 737 points while the All Share Index gained 0.73% to 56 050 points.

Shares in Discovery rose 2.82% to R146.00 after the company reported a 20% rise in full year profits.

Cratos Capital equities trader Greg Davies, referring to the results presentation given by the firm’s chief executive, said: “You will find Adrian Gore is a brilliant speaker and he can put his vision to the investors quite well so you often find the share price will improve after he has given a talk.”

Further gains on the bourse were curbed by the bullion sector which fell 3.08% dampened by the gold price hitting a 2-1/2 week low.

The biggest faller on the Johannesburg Top 40 Index, Anglo Gold Ashanti weakend 3.97% to R126.23.

Source: Moneyweb