UPDATE 1-South Africa's rand firms as cabinet approves power plan

  • Reuters
  • Forex News
UPDATE 1-South Africa's rand firms as cabinet approves power plan
Credit: © Reuters.

(Updates prices, adds stocks)

JOHANNESBURG, Oct 17 (Reuters) - South Africa's rand firmed on Thursday after the country's cabinet approved the promulgation of its long-delayed plan for electricity generation amid nationwide power cuts by state utility Eskom.

At 1535 GMT, the rand ZAR=D3 was 1% firmer at 14.7900 per dollar.

The Integrated Resource Plan (IRP 2019) will replace a previous blueprint not updated for almost a decade, and deals with electricity generation and the energy mix South Africa will rely on in the immediate future. news comes as a great relief after months of uncertainty, in the midst of yet another round of load shedding (power cuts) implemented by Eskom," said Bianca Botes, treasury partner at Peregrine Treasury Solutions.

South Africa was hit by power cuts for a second day on Thursday with Eskom saying a number of generating units were still out of service and some would not be back up and running for a few days. power cuts in February and March pushed first-quarter economic growth into contraction and raised the likelihood of South Africa losing an investment-grade rating.

Moody's is the last of the big three credit rating agencies to have an investment grade rating on South Africa and is due to deliver its latest credit review on Nov. 1.

Equities fell, with the broader Johannesburg All-share index .JALSH down 0.17% to 55,993 points, while the blue chip Top-40 index .JTOPI edged 0.28% lower to 49,715 points.

Diversified miners were among the losers, with Anglo American (LON: AAL ) AGLJ.J down 1.27% to 360.54 rand, while BHP Group BHPJ.J shed 2.010% to 305.93 rand.

"Commodity prices are under pressure at the moment, so all the diversified miners are trading weaker because of that and a stronger rand causing a pullback," said Jean Wessels, a trader at AG Capital.

Bucking the trend were gold miners, with bullion edging up as investors focused on lingering uncertainties over U.S.-China trade ties. DRDJ.J gained 2.5% to 6.95 rand, Harmony HARJ.J rose 2.070% to 45.41 rand, and Sibanye-Stillwater SGLJ.J was up 1.96% at 25.45 rand.

The yield on the benchmark government bond due in 2026 ZAR186= fell 1.3 basis points to 8.26%.

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