JOHANNESBURG - The Rand weakened against the dollar on Friday as investors took a cautious tone towards the currency ahead of rating decision by Moody’s, while stocks ended the week lower as bourse heavyweight Naspers fell.
At 5pm, the rand bid at R11.9869 to the dollar, 16.03cents softer than at the same time on Thursday.
“The ZAR (rand) has been a little bit on the back foot recently, that tends to tell us that jitters are crippling into the market as the Moody’s review approaches,” said ETM Analytics market analyst, Halen Bothma.
Moody’s, the only major agency with an investment grade rating on South African debt but with a downgrade review, is scheduled to make a decision by March23.
A cut to junk - following downgrades by S&P Global Ratings and Fitch - will see the country ejected from Citi’s influential World Government Bond Index, triggering up to R100billion in selling by foreign investors.
The rand and stocks largely shrugged off news that former president Jacob Zuma would be charged with corruption over a R30bn state arms deal in the late 1990s.
“It’s not really a decision that was expected to influence ZAR sentiment, the market is a lot more focussed on fundamentals in terms of the fiscal path of the country,” Bothma said.
In fixed income, the yield for the benchmark government bond due in 2026 rose 2 basis points to 8.145percent.
In the equities market, the benchmark JSE Top40 index fell 0.37percent to 51421.64 points, while the all share index ended the week 0.18percent lower to 58101.02 points.
Entertainment and technology firm Naspers weakened for the third consecutive session, with traders saying the market heavyweight firm was taking a breather after a strong run last week.
“Naspers has had a very good run recently. I would imagine its just taking a breather. Technology stocks in the US were also down last night (Thursday), so I would imagine its just a follow up from that,” said Greg Katzenellenbogen, director of Sanlam Private Wealth.
Naspers dropped 1.66percent to end the session at R3408.
Nedbank retreated 2.1percent to R291.34 and Capitec Bank lost 1.96percent to R918.46.