UPDATE 1-South Africa's rand retreats from 3-month high, stocks fall

  • Reuters
  • Forex News
UPDATE 1-South Africa's rand retreats from 3-month high, stocks fall
Credit: © Reuters.

* Rand retreats after rate hike rally

* Eyes on S&P credit rating review

* Stocks down ed by Naspers (Updates prices, adds stocks)

JOHANNESBURG, Nov 23 (Reuters) - South Africa's rand fell on Friday, giving back some of Thursday's gains after a hike in the official borrowing rate by the central bank helped the currency hit a three-month high.

Stocks fell led by bourse heavyweight Naspers NPNJn.J coming under pressure.

At 1503 GMT, the rand was 0.87 percent weaker at 13.8800 per dollar, easing along with other emerging market currencies as investors worried about Sino-U.S. trade tensions ahead of a high-stakes meeting between the leaders of the two countries next week. rand advanced more than 1 percent to 13.7150 on Thursday, its best since Aug. 10, after the South African Reserve Bank (SARB) raised rates by 25 basis points to 6.75 percent. African-focused investors were awaiting for the release of the S&P Global (NYSE: SPGI ) Ratings sovereign credit rating review later on Friday.

S&P rates South Africa's foreign currency debt 'BB' and its local currency debt 'BB+', having downgraded the country to below investment-grade last year following a deterioration in the economic outlook and public finances.

"The rating agency will most likely emphasise the continued poor economic growth and deterioration in the budget deficit projections, as well as the large and still growing fiscal debt burden, interest costs and contingent liabilities," said analysts from RMB in a note.

A senior S&P analyst said on Oct. 30 that South Africa's sovereign rating risked being downgraded due to concerns about the postponement of fiscal consolidation and lack of clarity around land expropriation. fixed income, the yield on the benchmark 2026 government bond ZAR186= fell 0.5 basis points to 8.935 percent, extending Thursday's rally.

In equities, the All Share index .JALSH fell 0.96 percent to 50,698 points while the Top 40 index .JTOPI was 1.02 percent lower at 44,536 points.

Naspers, which owns around a third of Hong Kong listed Tencent 0700.HK , closed down 1.33 percent to 2,694.07 rand after weakness in the Chinese technology giant's shares.

"Around the world tech stocks are out of favour at the moment," said Greg Davies, equities trader at Cratos Capital.

Among the losers on the bourse were banking shares .JBANK which were down 1.12, with Nedbank NEDJ.J 1.95 percent softer at 250.53 rand and FirstRand FSRJ.J 1.07 percent lower at 66.87 rand.

Private healthcare provider Life Healthcare LHCJ.J , was among the gainers on the bourse, closing up 7.62 percent to 26.42 rand after it reported a jump in full-year earnings.

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