S.African rand slides as current account deficit widens, Eskom woes weigh
* Rand extend losses after current account deficit widens
* Stocks down over 2 pct, track global markets
* Steinhoff shares tumble after accounts, PwC probe delayed
JOHANNESBURG, Dec 6 (Reuters) - South Africa's rand weakened
more than 2 percent on Thursday and bonds fell after the current
account deficit widened in the third quarter and power firm
Eskom said it was considering restructuring its debt, dimming
investor appetite for the currency.
Stocks touched six-week lows, tracking world markets which
slumped on revived fears of a flare-up in U.S.-China tensions
following the arrest of a top executive of Chinese tech giant
The rand was trading at 14.1825 per dollar by 1620
GMT, 2.4 percent weaker. It earlier reached a session-worst
14.2050 after closing at 13.8500 overnight.
Sentiment towards the currency was initially hit by general
risk off trade that weighed down most emerging currencies as
worries about the impact of the U.S.-China trade war on global
growth continued to ripple through markets.
Data showing the current account deficit widened to 3.5
percent of gross domestic product in the third quarter, and a
warning by Eskom that it may restructure its debt quickened the
rand's slide to its weakest since Nov. 16.
"The current account figure has added momentum to the rand's
slide from earlier in the session. The figures talk to the
vulnerability faced by South Africa to portfolio outflows,
especially in a environment where the Fed is tightening and
there are worries about Eskom," said ETM Analytics Halen Bothma.
"It was looking likely that a little bit of pressure was
going to start coming through especially as the Eskom headlines
have hit the market, especially the implications for the
sovereign rating," Bothma added.
Ratings firm Fitch on Thursday kept South Africa
sub-investment grade credit rating steady at subinvestment and
maintained its stable outlook, but warned that low growth and
the rising debt of state-owned firms posed a risk.
Government bonds were also weaker, with the yield on the
benchmark bond due in 2026 rising 9 basis points to
In equities, the All Share index was 1.75 percent
lower at 50,806 points. The blue-chip Top 40 index was
down 1.9 percent at 44,778 points.
Embattled retailer Steinhoff slumped 10 percent to
1.60 rand after it reported that it delayed publishing its 2017
and 2018 financial statements, citing delays to a forensic
Group Five plunged to a 26 percent to 25 cents
after its client in demanded $60.5 million compensation relating
to the unfinished Kpone power plant in Ghana.
(Reporting by Patricia Aruo, Nomvelo Chalumbira and Mfuneko
Toyana; Editing by Richard Balmforth)
First Published: 2018-12-06 13:10:19
Updated 2018-12-06 18:30:16
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