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South Africa's rand hits new 11-month low, stocks firm
(Updates prices, adds stocks)
JOHANNESBURG, Aug 8 (Reuters) - South Africa's rand steadied
in late trade on Thursday, after slipping to a new 11-month low
in the session as concerns about the outlook for domestic growth
and fears over a sovereign credit rating downgrade weighed on
At 1515 GMT, the rand traded flat at 15.0500 per
dollar, after hitting 15.2000 earlier, its weakest level since
Poor economic data, worries about financial troubles at
state-owned power firm Eskom and negative commentary from credit
rating agencies have all contributed to recent rand weakness,
exacerbating broader concerns about emerging markets and trade
tensions between the United States and China.
President Cyril Ramaphosa, who has staked his reputation on
reviving Africa's most developed economy, has struggled to do
so. Data showed on Thursday that mining and manufacturing output
contracted on a year-on-year basis in
The uncertain growth outlook has triggered fears of a rating
downgrade by Moody's, the last of the three big international
ratings agencies to have South African debt at investment grade.
"I would say the November review by Moody's is more likely
than not to result in a downgrade," said Nomura emerging markets
economist Inan Demir, pointing to both the worsening trajectory
of debt to GDP and the likely need to pump money into struggling
state-owned firms such as Eskom.
"It would be my baseline now," said Demir.
On the bourse, stocks ended a terrible week, marked by risk
aversion on trade tensions, on a high note as the All-share
index gained 0.56% to 55,535 points, while the Top-40
index rose 0.74% to 49,619 points.
After reeling from worries in the past week about an
escalating U.S.-China trade war denting global growth, emerging
markets and other risk assets breathed a sigh of relief as
surprisingly upbeat trade data from China and hints that Beijing
officials will limit losses in the yuan eased growth worries for
Local stocks had slipped over 2% to two-month lows.
"With all the talk of the trade wars and uncertainty
regarding the Fed rates, investors are looking for a direction
to park their funds," said Maghmoed Allie, a portfolio manager
at Sanlam Private Wealth.
Among the gainers BHP climbed 2.91% to 331.83 rand,
while Anglo American rose 2.9% to 339.05 rand.
South African e-commerce giant Naspers rose 2.37%
to 3,449.99 rand.
The Gold index ended a week's rally as equities
markets recovered, falling 4.14%.
In fixed income, the yield on the benchmark government bond
due in 2026 rose by 2 basis points to 8.395%.
(Reporting by Olivia Kumwenda-Mtambo and Onke Ngcuka;
Editing by Stephen Powell)
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