Rand stumbles after economic data
IOL Business - Jun 9th 2016, 11:49
Johannesburg - South Africa's rand retreated on Thursday as investor confidence was rattled by data showing the economy had contracted sharply in the first quarter, raising the risk of recession just as the country dodged downgrades to sub-investment grade.
By 06h45 GMT the rand had slipped 0.29 percent to 14.7675 per dollar, wiping out gains that saw the unit climb to a five-week high after Fitch affirmed South Africa's investment grade credit rating and maintained its stable outlook.
Bonds also backtracked with yields on government paper edging back up, with the benchmark paper due in 2026 adding 2 basis points to 9.07 percent.
Africa's most industrialised economy now looks on track for its first recession in seven years after economic output fell by 1.2 percent, according to Stats SA, as mining and agricultural sectors contracted sharply.
Traders, however, said the rand was likely to resume its rally as high-yielding emerging assets remained in favour with investors betting the United States would only raise lending rates later in the year.
“If local factors are mixed, global factors are certainly positive. The environment has been risk-on ever since (Federal Reserve Chair Janet) Yellen's Monday speech,” said currency strategist at Rand Merchant Bank John Cairns in a note.
Cairns said the weak growth data also suggested the South African Reserve Bank's tightening cycle, which has seen the bank lift rates by 200 basis points since 2014, was over.
On the bourse, the JSE securities exchange's Top-40 futures index was down 0.09 percent, pointing to a flat start when trade resumed at 07h00 GMT.From IOL Business
4 reasons to be hopeful about South Africa’s economy
12/09/2019 - 14:40
Markets responded positively to South Africa’s economic growth rebounding in the second quarter, up 3.1%, and 0.9% for the year to June 2019.
Eskom: The largest threat to the stability of the SA economy
10/09/2019 - 09:45
On Tuesday 23 July, South African Finance Minister Tito Mboweni tabled a bill before the National Assembly which would see national state-owned power utility Eskom benefit from an allocation of R59 billion over the next three years.
Innovative leasing deals boost Kenya's office market
04/09/2019 - 09:25
A creative approach to leasing deals is helping innovative landlords offset the challenges of high vacancies in an overstocked Nairobi office market, according to Broll Property Intel’s latest Kenya Office Market Snapshot H1:2019 report.
Lego's sales bounce back with the help of Marvel superheroes
04/09/2019 - 09:11
Models of superheroes and villains from Marvel’s Avengers movies helped lift first-half sales at Lego, as the Danish toymaker continued its turnaround drive with investments in China, India, the internet and new stores.
No pain, no gain for SA economy
02/09/2019 - 16:22
Despite SA’s fiscal crisis — and the fact that the country has very little to show for the loose fiscal policy run over the past decade — there is a lobby (mainly on the Left) that thinks the best way to resolve SA’s growth and fiscal challenges is to inject further fiscal stimulus into the economy.