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Monday, August 15, 2022

South Africa’s rand firms on weaker dollar, Steinhoff recovers

South Africa’s rand firms on weaker dollar, Steinhoff recoversJOHANNESBURG: South Africa’s rand firmed against the dollar on Monday as the greenback retreated, while a recovery of Steinhoff’s shares following a week of turmoil at the global retailer lifted blue chip stocks.

At 1455 GMT, the rand traded at 13.5900 per dollar, up 0.4 percent compared with its close on Friday at 13.6450.

The dollar edged lower against a basket of currencies on Monday, snapping a five-day rising streak as investors took profits before a US central bank meeting this week.

Further gains were curbed by nervous South African investors ahead of the ruling African National Congress (ANC) leadership conference this weekend, where a successor to party leader, President Jacob Zuma, will be elected.

“We suspect, however, that the rand’s gains are going to abate and the market will be cautious going into the weekend given the decisive vote is due on Sunday,” said John Cairns, a currency strategist at Rand Merchant Bank.

Investors also readied for a heavy week of data, including consumer price inflation and current account numbers.

The yield on South Africa’s benchmark government bond due in 2026 edged up 1 basis point to 9.215 percent.

On the stock market, the benchmark Top-40 index advanced 0.1 percent to 51,711 points, while the broader All-share index was flat at 57,997.

Shares in household goods retailer Steinhoff recovered some of their losses suffered after the company flagged accounting irregularities last week, rallying 56 percent to 9.35 rand.

The company, which has its primary listing in Frankfurt, asked its lenders for “continued support” as it focuses on cash-flow to keep its operations running after its chief executive resigned and its shares tanked 80 percent in four days.

There was some buying of the stock off a low base, but most investors were waiting for more information, said Independent Securities trader Ryan Woods.

“On the positive side, it does look like Christo Wiese is doing a salvage job,” Woods added, referring to the retail group’s biggest shareholder and its chairman, who is temporarily at the helm.

Banks weighed on the bourse, with the banking index shedding 2.7 percent and Barclays Africa Group, the biggest loser among the blue-chips, declining 4.1 percent to 150.50 rand.

Copyright Reuters, 2017

Source: Brecorder.com

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