STANBANK: 18,074 -396 (-2.14%)
South African rand bounces back after steep sell-off
JOHANNESBURG, Aug 15 (Reuters) - The South African rand
gained more than 1 percent against the dollar on
Thursday, pulling back from a steep sell-off as worries about
the global economy eased slightly.
The rand has been on a torrid run this month, losing around
6 percent against the U.S. currency on a dismal domestic growth
outlook and fears the United States could tip into recession
over its trade war with China.
The rand traded at 15.25 versus the dollar by 1630 GMT,
around 1.2 percent stronger than its previous close, after
higher-than-expected U.S. retail sales data.
Some international investors use the South African currency
as a proxy for emerging market risk, making it highly
susceptible to swings in sentiment on global markets.
Some traders said the recovery in the rand was likely to be
short-lived, given grave concerns about the country's debt
trajectory and the sluggish pace of economic reform.
A senior International Monetary Fund representative said on
Thursday that South Africa's public debt was reaching
On the Johannesburg bourse, stocks recovered some ground
lost earlier in the day but still closed weaker, with investors
averse to risk a day after an inversion of the U.S. Treasury
bond yield curve, a sign some investors see as a harbinger of
recession in the world's largest economy.
The Johannesburg Stock Exchange's All-Share index
lost 0.35% to 53,841 points and the benchmark Top-40
was down 0.33% to 48,117 points.
Bullion producer Gold Fields led the declines on
the blue-chip index, slipping 9.76% to 80.98 rand after it
reported a lower than expected increase in half-year profits.
Fellow miners Anglo American Platinum and Anglo
American fell 3.79% to 812.12 rand and 3.49% to 313.18
rand, respectively. South African paper and pulp maker Sappi
lost 2.56% to 42.68 rand.
The banking index rose 3.55% to 8,340 points.
Insurer Discovery closed up 5.26% to 105.91 rand, while
Standard Bank increased 4.58% to 173.50 rand and Absa
rose 4.03% to 152.07 rand.
"Shares are trading at levels that we've last seen - in
valuation levels - 10 years ago," said FNB Wealth and
Investments portfolio manager Wayne McCurrie. "They're cheaper
than what they were in the teeth of the financial crisis."
(Reporting by Onke Ngcuka and Alexander Winning
Editing by David Holmes)
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