BLUETEL: 355 -3 (-0.84%)
South Africa's rand firms after Moody's hints at ratings reprieve
(Updates prices, adds stocks)
JOHANNESBURG, Feb 22 - South Africa's rand strengthened
against the dollar on Friday, putting it on track to end a week
marked by the annual budget higher, after Moody's signalled the
nation's spending plans did not weaken its policy credibility.
Stocks rose, with Truworths International among the
big gainers after management presented a detailed half-year
The rand rose 0.37 percent to 13.9675 to the dollar
by 1607 GMT compared with the previous day's close of 14.0200 in
New York and the week's low of 14.3700 on the day of the budget.
On Thursday, Moody's, the last of the big three ratings
agencies to maintain an investment grade on South Africa, said
that the government's decision to raise its spending ceiling by
16 billion rand ($1.14 billion) did not weaken fiscal policy
Attention had turned to rating agencies' reaction to the
budget, which included a bleaker outlook for economic growth and
debt and a bailout for struggling state-run power firm Eskom,
after concern it could prompt a downgrade.
But Nedbank analysts Mehul Daya and Walter de Wet wrote in a
note on Friday that market reaction had been too negative.
"The main talking point in South Africa financial markets
over the past couple of days has been the rand's ability to
contain weakness and in fact strengthen after the 2019 National
Budget," they said.
They added the budget had been presented in the "most
credible form possible, which would mean South Africa could
avert a credit downgrade by Moody's but we could still see a
Government bonds firmed, with the yield on benchmark 2026
paper easing 1 basis points to 8.715 percent.
On the bourse, the Johannesburg all-share index
rose 0.92 percent to 55,992 points, while the top-40 index
climbed 1.08 percent to 49,735 points.
Middle to high-end fashion retailer topped the
Top-40 index, rising 5.44 percent to 76.02 after the firm
provided more context on its half-year results released on
Thursday and announced the launch of new concept stores in the
UK and South Africa to boost sales there.
Blue Label Telecoms closed 3.81 percent stronger
to 5.45 rand after it said a consortium had agreed to take a
minority stake in South Africa's third largest mobile carrier
Cell C, of which it owns 45 percent. It said the deal would help
the debt-ridden company.
($1 = 13.9804 rand)
(Reporting by Olivia Kumwenda-Mtambo and Nqobile Dludla;
Editing by Pritha Sarkar)
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