UPDATE 1-South Africa's rand rides optimism over new power plan

  • Reuters
  • Forex News
UPDATE 1-South Africa's rand rides optimism over new power plan
Credit: © Reuters.

(Updates to reflect afternoon trade)

JOHANNESBURG, Oct 18 (Reuters) - South Africa's rand firmed on Friday, building on gains made after the government released a long-delayed plan for electricity generation to address crippling power cuts.

At 1620 GMT, the rand ZAR=D3 was up 0.3% at 14.7900 per U.S. dollar.

The South African currency rallied from near 15.00 to a session-best 14.77 on Thursday, ending a losing streak triggered by state power utility Eskom's resumption on Wednesday of nationwide controlled blackouts.

Eskom has blamed unforeseen breakdowns at some of its coal-burning plants, but analysts say they are a symptom of mismanagement over many years, which has seen it sink into roughly 440 billion rand ($30 billion) of debt. release of the new electricity generation plan, replacing a previous blueprint not updated for almost a decade, gave investors a degree of policy certainty, but Eskom still does not have a permanent chief executive. African government bonds traded slightly firmer, with the yield on the benchmark government paper due in 2026 ZAR186= down 2 basis points at 8.24%.

Stocks closed weaker, with the Johannesburg All-share index .JALSH down 0.48% to 55,723 points, while the benchmark Top-40 index .JTOPI declined 0.41% to 49,511 points.

Bank stocks fell as the index .JBANK edged 1.24% lower. FirstRand FSRJ.J slipped 1.89% to 65.99 rand, Standard Bank SBKJ.J shed 1.44% to 179.20 rand and Rand Bank Merchant RMHJ.J lost 1.02% to 80.17 rand.

Gold stocks .JGLDX shone with the index up 1.76% amid global market uncertainty. Harmony HARJ.J rose 3.41% to 46.96 rand and AngloGold America ANGJ.J 2.02% to 306.70 rand.

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