South Africa’s rand weakens as coronavirus worries weigh

Date:

JOHANNESBURG, March 11 (Reuters) – South Africa’s rand weakened on Wednesday as another bout of risk aversion dragged emerging market currencies lower, with investors fretting over the impact of the coronavirus and opting for safe-haven assets.

Thank you for reading this post, don't forget to subscribe!

Stocks fell, as a drop in oil prices hit chemical and energy firm Sasol SOLJ.J.

At 1510 GMT, the rand ZAR=D3 was 1.03% weaker at 16.1100 per dollar against an overnight close of 15.9460 in New York, once again crossing the key technical threshold of 16.00 that traders have used to gauge likely direction of the rand’s moves.

Since Monday’s sharp fall to just shy of 17.00, the rand has managed to claw back some ground, but ongoing uncertainty about the effectiveness of measures taken by central banks globally to limit the coronavirus has kept volatility elevated.

News that state power firm Eskom would cut up to 4,000 megawatts of electricity from the national grid, partly due to faults at its Koeberg nuclear plant, has also rekindled bearish bets on the local unit.

“Although a degree of calm has returned to the world’s financial markets, there are various factors that could change this instantly,” Nedbank’s Reezwana Sumad said in a note.

“Locally, the rand remains exceptionally vulnerable. Any strength has been limited and moves to the topside have been more extreme, exacerbated by the persistent woeful performance of the electricity utility.”

In equities, the Top-40 .JTOPI index was down 0.82% to 43,891 points while the broader all-share .JALSH fell 0.79% to 49,074.

Sasol was the biggest decliner, sitting at the bottom of both indexes, down 26.44% to 52.72 rand.

Oil prices fell on Wednesday after Saudi Arabia and the United Arab Emirates announced plans to boost production capacity and OPEC and the U.S. Energy Information Administration cut oil demand forecasts because of the coronavirus.

Shares in Africa’s largest mobile network by subscribers, MTN MTNJ.J, fell 1.72% after it said Chief Executive Officer Rob Shuter would step down at the end of a four-year term in March 2021.

In fixed income, the yield on the benchmark 2030 government issue ZAR2030= was up 6 basis points to 9.26%.

(Reporting by Mfuneko Toyana and Olivia Kumwenda-Mtambo; Editing by Andrew Cawthorne)

((mfuneko.toyana@thomsonreuters.com; +27117753153; Reuters Messaging: mfuneko.toyana.thomsonreuters.com@reuters.net))

Naija247news
Naija247newshttps://www.naija247news.com/
Naija247news is an investigative news platform that tracks news on Nigerian Economy, Business, Politics, Financial and Africa and Global Economy.

Share post:

Subscribe

Popular

More like this
Related

Mbah inaugurates ESUT Governing Council

Governor of Enugu State, Dr. Peter Mbah has inaugurated...

Canada-based Nigerian playwright, Oguntokun is dead

Renowned Nigerian playwright and theatre director, Wole Oguntokun, is...

Atiku’s loyalists declare support for Tinubu, Fubara

By Daniel Abia, P/Harcourt Members of the former Rivers State...

FAAN shuts KFC outlet at MMIA

In response to a social media report by a...
Social Media Auto Publish Powered By : XYZScripts.com

Discover more from Naija247news

Subscribe now to keep reading and get access to the full archive.

Continue reading