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South African markets on knife edge ahead of Ramaphosa address
(Adds stocks, quotes)
JOHANNESBURG, Feb 7 (Reuters) - South Africa's rand weakened
on Thursday against a broadly stronger dollar as investors
prepared for President Cyril Ramaphosa's state of the nation
address (SONA) later in the day.
On equity markets, banks and retailers were among the worst
performing blue-chip firms.
At 1502 GMT the rand was 0.54 percent softer at
13.6200 per dollar compared to its close of 13.5475 overnight in
With no top-tier economic data due locally, focus shifted to
Ramaphosa's speech, which comes after the market close, with
investors looking for clues about the fate of cash-strapped
state power firm Eskom.
In a note, Investec economist Annabel Bishop said
expectations were for the speech to focus on key state-owned
entities which are under financial pressure, with a formal
announcement likely on Eskom's expected restructuring into three
She added that the state would was likely to provide further
financial support to Eskom in the meantime.
"Buying sentiment towards the Rand will be heavily
influenced by the tone Ramaphosa adopts during the SONA," FXTM
Chief Market Strategist, Hussein Sayed said in a note.
Bonds also weakened, with the yield on the benchmark
government issue due in 2026 adding 0.5 basis points to 8.66
Stocks dropped, with the Johannesburg Stock Exchange's
top-40 index down 1.34 percent at 47,672 points, and
the broader all-share index slipping 1.26 percent to
Truworths lead the declines, down 4.6 percent, with
TFG (The Foschini Group), pharmacist Clicks,
Nedbank and Woolworths following behind it.
Confidence in firms exposed to South African consumers -
whose budgets are tight in a lagging economy - dipped after a
series of weak trading updates from big retailers in recent
Meanwhile, Clover Industries regained some of the
ground lost earlier when a minority partner in a consortium that
offered to buy the dairy firm said it was reviewing its role in
Clover shares fell almost 10 percent on the news, but closed
just 4.13 percent down.
(Reporting by Nqobile Dludla and Emma Rumney; Editing by
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