Rand retreats before GDP data, stocks move up

Second-quarter GDP data will be released on Tuesday, and analysts polled by Reuters are forecasting a quarter-on-quarter contraction of well over 40%.

JOHANNESBURG – The South African rand fell on Monday, as investors dumped the currency a day before gross domestic product data expected to show a massive contraction during the country’s strict coronavirus lockdown.

At 1600 GMT the rand was around 0.93% weaker than its previous close at 16.7500 per dollar.

Second-quarter GDP data will be released around 0930 GMT on Tuesday, and analysts polled by Reuters are forecasting a quarter-on-quarter contraction of well over 40%, extending a recession that pre-dated the COVID-19 crisis.

Adding to the downbeat mood were power cuts by state utility Eskom, which has long struggled to meet electricity demand because of faults at its ailing coal-fired power stations.

The rand had been on a strengthening trend since mid-August, helped by a healthy investor appetite for riskier emerging market assets and a weak dollar, but those gains are now coming to a halt as the state of the domestic economy comes back into sharper focus.

“The single biggest threat to the ZAR over the longer term is the state of SA’s fiscal position. It is unsustainable,” analysts at ETM Analytics said in a note. “The GDP figure could well be the worst print in a century.”

The broader stock market index moved up again after seven straight sessions of losses, boosted by precious metal companies that gained on the Johannesburg Stock Exchange (JSE) on higher commodity prices.

An index of 10 mining companies was up 2.25% and the gold mining index was up 2.94% at the end of day’s trading.

The benchmark FTSE/JSE all share index was up 0.97% to 54,400 points, while the top 40 companies index inched up 0.94% to 50,185 points at close of trading hours.

Bonds were marginally firmer as well, with the yield on the benchmark 2030 government issue falling 4 basis points to 9.19%.

Latest articles

Simple Tone – Simple Fridays Vol 012 Mix

Home » Songs Simple Tone Simple Fridays Vol 012 Mix Mp3 DOWNLOADSimple Tone continues on his streak of mix deliveries. Check out...

uBizza Wethu – Hlala Nami Ft. Nokubonga

Home » Songs DOWNLOAD uBizza Wethu Hlala Nami Mp3 Ft. NokubongaCheck out this new Gqom song from uBizza Wethu which he titles...

De Mthuda & Ntokzin – Boss Zonke

Home » Songs DOWNLOAD De Mthuda & Ntokzin Boss Zonke Mp3Producer De Mthuda & Ntokzin team up once again on this new...

Ed Harris, King Retro & Master Dee – Pholas Ft. King Max & SJA

Home » Songs DOWNLOAD Ed Harris, King Retro & Master Dee Pholas Mp3 Ft. King Max & SJAEd Harris, King Retro, and Master Dee appear...

Related articles

Leave a reply

Please enter your comment!
Please enter your name here