S.African rand heads for over 3 pct weekly loss on power crisis
(Updates prices, adds stocks)
JOHANNESBURG, Feb 15 (Reuters) - South Africa's rand was on
course for a loss of more than three percent against the dollar
this week, as five consecutive days of power cuts reminded
investors about the fragility of an economic recovery.
EOH Holdings led stocks higher after issuing an
update on its relationship with Microsoft.
At 1520 GMT, the rand traded at 14.1250 versus the
dollar, barely changed from its previous close of 14.1275 and
more than 3.5 percent weaker than at the end of last week.
Struggling state power firm Eskom implemented one of the
worst power cuts in several years from Sunday to Thursday,
hurting small businesses without backup power generators and
industrial firms that consume large volumes of power.
Eskom said power cuts were not likely on Friday, but warned
the power system remained vulnerable.
Investors are waiting for more details on how President
Cyril Ramaphosa's government plans to shore up Eskom's balance
sheet - plans which should be unveiled during a budget speech by
the finance minister on Feb. 20.
After this week's steep fall in the rand, Nedbank CIB
analysts said they were more comfortable that risks to the
currency were better priced.
"South Africa's fiscal position has come to the fore as the
market anxiously awaits more details on Eskom and how the
government will account for this in the budget," Nedbank CIB
analysts wrote in a research report.
Government bonds firmed on Friday, with the yield on the
benchmark 2026 bond falling 6.5 basis points to close
at 8.88 percent.
On the bourse, stocks ended the week higher, with the
Johannesburg All-share index up 0.19 percent at 54,628
points, while the blue-chip Top-40 index up 0.2 percent
at 48,446 points.
The Chief Executive of EOH Holdings issued an open letter on
Friday, in which he described a recent and fruitful meeting with
the firm and the Microsoft leadership after Microsoft announced
its intention on Tuesday to terminate its channel partner
agreement with EOH's subsidiary.
CEO Stephen van Coller said in the letter Microsoft has
advised that it is taking EOH's proposals under consideration
and further review.
Its shares ended 14.64 percent stronger at 19.50 rand on the
announcement and other measures that EOH is doing to strengthen
Packaging and paper firm Mondi rose 0.94 percent to
353 rand after flagging an up to 29 percent increase in
full-year basic headline earnings per share.
Food producer Pioneer Food Group rose 1.47 percent
to 81.25 rand after saying it increased turnover by 7.8 percent
in the four months to January 31.
(Reporting by Alexander Winning and Nqobile Dludla, Editing by
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