SHOPRIT:  12,250   +240 (+2.00%)  25/01/2020 00:00

South Africa's rand steadies, stocks down

(Updates prices)

JOHANNESBURG, July 30 (Reuters) - South Africa's rand steadied on Tuesday as traders, eschewing big transactions despite poor unemployment figures and a warning of another loss from power utility Eskom, stayed on the sidelines ahead of a U.S. monetary policy announcement. At 1515 GMT, the rand traded at 14.1800 per dollar, not far off Monday's close of 14.1650.

"Surprisingly, the dire (unemployment) number had no effect on the currency as (Wednesday's) anticipated U.S. Federal Reserve interest rate cut overshadows local market events for the time being," said Bianca Botes, a treasury partner at Peregrine Treasury Solutions.

The unemployment rate jumped to its highest since the global financial crisis more than a decade ago, piling more pressure on President Cyril Ramaphosa’s pledge to turn around a shrinking economy.

Meanwhile, power utility Eskom said it expected to make a loss of around 20 billion rand ($1.4 billion) in the 2019/20 financial year, a similar loss to the previous year due to a steep increase in debt-servicing and fuel costs.

Rating agencies Fitch and Moody's last week both warned about fiscal pressure on South Africa and highlighted Eskom as a risk, pressuring the rand.

Equities closed weaker with the Johannesburg Stock Exchange's all-share index down 1.37% to 57,242 points, while the Top-40 index fell 1.48% to 51,207 points.

Leading the declines was South African retailer Massmart which fell almost 20% before closing down 15.45% at 49.80 rand per share after it warned half-year operating profits would hit a 13-year low.

South Africa's second biggest insurer Old Mutual fell 5.55% to 19.24 rand after the High Court ruled its dismissal of former CEO Peter Moyo was unlawful.

On the upside, Africa's biggest retailer Shoprite closed up 5.75% at 157.22 rand after it forecast performance would improve in the second half.

In fixed income, the yield on the benchmark government bond due in 2026 edged down to 8.31%. (Reporting by Olivia Kumwenda-Mtambo and Onke Ngcuka; editing by John Stonestreet)

2019-07-30 18:31:07

© 2020 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.