Breaking News
0

UPDATE 2-S.African rand slides as current account deficit widens, Eskom woes weigh

ForexDec 06, 2018 18:30
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. UPDATE 2-S.African rand slides as current account deficit widens, Eskom woes weigh

* Rand extend losses after current account deficit widens

* Stocks down over 2 pct, track global markets

* Steinhoff shares tumble after accounts, PwC probe delayed (Updates prices)

JOHANNESBURG, Dec 6 (Reuters) - South Africa's rand weakened more than 2 percent on Thursday and bonds fell after the current account deficit widened in the third quarter and power firm Eskom said it was considering restructuring its debt, dimming investor appetite for the currency.

Stocks touched six-week lows, tracking world markets which slumped on revived fears of a flare-up in U.S.-China tensions following the arrest of a top executive of Chinese tech giant Huawei. rand ZAR=D3 was trading at 14.1825 per dollar by 1620 GMT, 2.4 percent weaker. It earlier reached a session-worst 14.2050 after closing at 13.8500 overnight.

Sentiment towards the currency was initially hit by general risk off trade that weighed down most emerging currencies as worries about the impact of the U.S.-China trade war on global growth continued to ripple through markets.

Data showing the current account deficit widened to 3.5 percent of gross domestic product in the third quarter, and a warning by Eskom that it may restructure its debt quickened the rand's slide to its weakest since Nov. 16. current account figure has added momentum to the rand's slide from earlier in the session. The figures talk to the vulnerability faced by South Africa to portfolio outflows, especially in a environment where the Fed is tightening and there are worries about Eskom," said ETM Analytics Halen Bothma.

"It was looking likely that a little bit of pressure was going to start coming through especially as the Eskom headlines have hit the market, especially the implications for the sovereign rating," Bothma added.

Ratings firm Fitch on Thursday kept South Africa sub-investment grade credit rating steady at subinvestment and maintained its stable outlook, but warned that low growth and the rising debt of state-owned firms posed a risk. bonds were also weaker, with the yield on the benchmark bond due in 2026 ZAR186= rising 9 basis points to 9.065 percent.

In equities, the All Share index .JALSH was 1.75 percent lower at 50,806 points. The blue-chip Top 40 index .JTOPI was down 1.9 percent at 44,778 points.

Embattled retailer Steinhoff SNHJ.J slumped 10 percent to 1.60 rand after it reported that it delayed publishing its 2017 and 2018 financial statements, citing delays to a forensic investigation. Five GRFJ.J plunged to a 26 percent to 25 cents after its client in demanded $60.5 million compensation relating to the unfinished Kpone power plant in Ghana.

UPDATE 2-S.African rand slides as current account deficit widens, Eskom woes weigh
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email