UPDATE 1-South African rand weaker ahead of budget, stocks lower

By Kitco News / February 19, 2018 / www.kitco.com / Article Link

* Rand weakens along with emerging markets

* Markets await budget speech on Wednesday

* Stocks down amid low trading volumes


(Adds latest figures, analyst quotes)

JOHANNESBURG, Feb 19 (Reuters) - South Africa's rand weakened along with other emerging currencies on Monday as the dollar regained ground it lost last week and investors awaited details of new president Cyril Ramaphosa's plans to revive the economy.

Stocks came off highs reached last week, amid low trade volumes with market holidays in the United States and China.

At 1509 GMT the rand was 0.37 percent weaker at 11.6800 per dollar, having touched a session-best 11.6100 as trade in New York resumed before retreating as the greenback extended gains for a second day.South African markets have rallied in recent days, with the rand hitting a three-year high, driven by hopes that a change in the political leadership could re-ignite the continent's most industrialised economy. Ramaphosa's maiden state of the nation address on Friday pushed the currency to the three-year milestone before it faded with profit-taking and defensive positioning as a budget and credit ratings reviews loom.

Markets are keenly awaiting Finance Minister Malusi Gigaba's budget speech on Wednesday.

"Expect sharp rand reaction directly after the budget, and again when Moody's provides its response - presumably within a day or two of the event," said Rand Merchant Bank chief strategist John Cairns in a note.

Hurt by nine years of mismanagement under scandal-plagued president Jacob Zuma, South Africa faces a 50.8 billion-rand ($4.36 billion) revenue gap and soaring debt that Gigaba will have to tackle. Bonds were firmer, with the yield on the benchmark paper due in 2026 down 1.5 basis points to 8.1 percent.

On the bourse, the benchmark Top-40 index fell 0.75 percent to 51,717 points while the All-Share index lowered 0.71 percent to 58,701 points.

Stocks saw a broad-based decline amid low volumes, after the main index hit a more-than-three-year high on Thursday, with Dis-Chem Pharmacies fell 3.61 percent to 35.20 rand, Curro Holdings lowered 6.66 percent to 36.15 rand and AngloGold Ashanti weakened 2.74 percent to 2.74 rand.

"Markets are taking a breather, volumes are noticeably thinner than when America is open and the Chinese trade," said Independent Securities' trader Ryan Wood.


(Reporting by Mfuneko Toyana and Tanisha Heiberg; editing by Andrew Roche)

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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