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Rand slides on firmer greenback, stocks inch up

Steinhoff extends losses.

The rand fell more than one% against the US dollar on Thursday as the greenback rose, while stocks edged up slightly, despite another share plunge by Steinhoff International.

At 1543 GMT, the rand was 1.11% weaker at 13.67 per dollar, after earlier hitting a session low of 13.69.

“It’s more the dollar play than anything else,” said TreasuryOne currency dealer Phillip Pearce.

The dollar hit a two-week high against a basket of currencies on Thursday on stronger risk appetite across markets and on optimism that the United States will successfully push through a tax reform programme.

South African investors are also wary ahead of the ruling African National Congress (ANC) leadership conference next week, where a successor to the current leader, President Jacob Zuma, will be crowned.

The rand had gained earlier this week on hopes that Deputy President Cyril Ramaphosa – who is seen as more investor friendly – will win the race to become the next leader of the ANC.

Read: The Ramaphosa effect

In fixed income, the yield for the benchmark government bond due in 2026 added 7 basis points to 9.245%.

On the stock market, the benchmark Top 40 Index was up 0.2% at 51 656 points, while the broader All Share Index rose by 0.01% to 58 013 points.

The two best performing blue-chips were e-commerce firm Naspers and private hospital group Mediclinic .

Both companies have large investments outside South Africa and their shares typically gain when the rand weakens.

Naspers shares advanced 2.5% to R3 532.02, while Mediclinic stock rose 4% to R108.72.

Steinhoff weighed on the bourse as its shares extended losses after it said on Tuesday it had appointed PwC to investigate “accounting irregularities” and its chief executive, company veteran Markus Jooste, quit.

Read: Steinhoff skeletons emerge

Shares in Steinhoff plummeted to an eight-year low of R10, down 43.2%, widening losses after a 60% decline on Wednesday. 

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