Registered users can save articles to their personal articles list. Login here or sign up here

Rand, stocks slip ahead of budget speech

Currency weakens 0.4%.

The rand slipped on Tuesday, retreating from last week’s three-year high as investors bagged profits ahead of the government’s budget speech.

Investors are also focusing on an expected cabinet shake-up under new President Cyril Ramaphosa and the future of Finance Minister Malusi Gigaba, who is due to deliver the budget speech on Wednesday.

South Africa is holding on to its only remaining investment credit rating from Moody’s, which is widely expected to use the contents of the budget to decide its next move.

“The key determinant of whether South Africa will receive a downgrade from Moody’s is tomorrow’s budget,” said Annabel Bishop, chief economist at Investec.

By 1528, the rand was trading 0.4% weaker at 11.73 per dollar, but within a striking distance of a three-year high of 11.56 scaled last week with the resignation of Jacob Zuma as president.

On the bourse, stocks fell sharply, led by retailers, amid concerns the budget would unveil tax proposals that would put pressure on consumer spending.

The benchmark Top 40 Index fell 1.35% to 51 020 points, while the All Share Index dropped 1.32% to 57 929 points.

General retailers led the bourse lower, with Mr Price down 4.29% to R273.00 and Shoprite 2.69% weaker at R240.44

“It’s probably in anticipation of a bad budget tomorrow, the market probably pricing in not very good news… The sector that is most going to be hurt is the retailers,” said BP Bernstein trader Vasili Girasis.

Elsewhere, AngloGold Ashanti fell 3.77% to R116.24 after posting lower annual earnings.

In fixed income, government bonds were flat, with the yield on the benchmark instrument due in 2026 at 8.10%.


To comment, you must be registered and logged in.


Don't have an account?
Sign up for FREE


ZAR / Euro



Follow us:

Search Articles:Advanced Search
Click a Company: