UPDATE 1-South Africa's rand slips in erratic trade as stocks slip, led by property

  • Reuters
  • Forex News
UPDATE 1-South Africa's rand slips in erratic trade as stocks slip, led by property

(Adds latest prices, analyst quotes)

JOHANNESBURG, March 23 (Reuters) - South Africa's rand weakened in on Tuesday as caution prevailed ahead of a closely watched testimony by top U.S. policymakers, with investors looking out for comments on the rise of bond yields.

At 1500 GMT, the rand ZAR=D3 was 0.14% weaker at 14.7400 per dollar.

The currency made strong gains in the previous session while South African markets were closed for a public holiday, but was on the back foot in early trade, hitting a low of 14.9400 before recovering. The dollar eased ahead of U.S. Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen's public remarks due later in the day.

The rand had so far weathered spillover from the Turkish lira's tumble TRY= on Monday, with attention expected to turn to the local central bank meeting on Thursday.

Analysts see the bank holding rates steady despite fellow emerging markets entering hiking cycles this year.

"While a number of other emerging market (EM) economies have begun to increase their rates - SA risks seeing less competitive interest rates for interest rate investors if it does not hike too," said Annabel Bishop, chief economist at RMB.

"The domestic currency will remain erratic, swinging rapidly both stronger and weaker, as global market events continue to impact its direction. However, higher interest rates in EM economies while the SARB sits pat would underlay weakness in the rand."

Bonds weakened, with the yield on the government bond due in 2030 ZAR2030= up 2.5 basis points at 9.36%.

Stocks slipped as some property companies reported bleak results and as new lockdown restrictions put more pressure on shopping mall owners.

The Johannesburg All-Share index .JALSH ended the day 0.9% weaker at 65,318 points, while the Top 40 index .JTOPI fell 0.86% to 59,793 points.

The South Africa-listed property index .JSAPY fell 2.12%, led by shopping mall and office owner Liberty Two Degrees L2DJ.J , down 11.11%, Attacq Ltd ATTJ.J , down 4.57%, EPP N.V. EPPJ.J , down 2.43% and Resilient REIT RESJ.J , down 0.76%.

Attacq, the owner of Mall of Africa, said its distributable income per share, which is the primary measure of underlying financial performance in the listed property sector, more than halved in the six months to December and did not declare a dividend for the review period. fell as the Polish government announced a partial limit on shopping centre operations.

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