UPDATE 1-S.Africa's rand steady in wait-and-see trade

  • Reuters
  • Forex News
UPDATE 1-S.Africa's rand steady in wait-and-see trade
Credit: © Reuters.

(Adds latest prices, analyst comments)

JOHANNESBURG, Oct 21 (Reuters) - South Africa's rand edged higher on Monday, with traders holding out for a decisive move by the currency before making any big bets.

At 1613 GMT the rand ZAR=D3 was 0.09% firmer at 14.7570 per dollar, little changed from its close on Friday at 14.7700.

Sentiment towards emerging markets was boosted as hopes for resolving the China-U.S. trade war pushed investors towards higher-risk assets. MKTS/GLOB

The rand has hovered near key technical resistance at 14.75 and 14.70 over the past two weeks but failed to hold below the levels, leaving it open to bouts of volatility and event risk.

The crisis at heavily indebted Eskom, which implemented days of power cuts last week after a number of its generating units broke down, has been the main local catalyst for rand weakness while offshore events have kept speculative buyers interested .

"We believe the rand will remain volatile, with the resolutions to the Eskom crisis, security of electricity supply and alleviating pressures on economic growth all key," said chief economist at Investec Annabel Bishop in a note.

On Monday, Eskom said its 2,000 megawatt Hendrina Power Station had suffered a "multi unit trip", but that the failure would not lead to nationwide electricity cuts as it had reserve capacity to rely on. bonds weakened, with the yield on benchmark 2026 instrument ZAR186= up 3.5 basis points to 8.275%. ZAR186=

In the equities market, Johannesburg-listed shares of Capital & Counties Properties Plc (Capco) CCOJ.J surged to their highest level since Nov 11, 2018 after investment vehicle of luxury property tycoon Nick Candy confirmed it is considering a cash offer for the 85-year old UK-based company. which was the second biggest gainer on the All-Share index .JALSH , jumped 8.74% to 51.50 rand.

Other locally-listed UK property firms, such as Intu Properties Plc (LON: INTUP ) ITUJ.J , up 7.14% to 9.60 rand, and Hammerson HMNJ.J , up 2.33% to 61.50 rand, were boosted by hopes that Britain will avoid a disorderly exit from the European Union.

"Capco has been trading at a huge discount to its underlying value. One of the reasons that they've been so cheap is because of worries over Brexit and things are now starting to develop in the right direction, although there is still uncertainty," Sasfin Holdings stockbroker David Shapiro said.

"If you look at sterling it's suggesting that there is a good chance that a Brexit deal will be done even though there has been another delay."

On Monday, the British parliament's speaker refused to allow a vote on Prime Minister Boris Johnson's Brexit divorce deal, suggesting Johnson faces further problems in the Brexit ratification. Johannesburg All-Share index .JALSH gained 0.7% to 56,110 points when it closed at 1500 GMT, while the Top-40 index rose 0.65% to 49,834 points in line with emerging stocks on signs of progress in U.S.-China trade talks.

Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

Error: File type not supported

Drop an image here or