S.Africa's rand slumps to two-month low as Mabuza sworn in to parliament
(Adds latest prices, analyst comments)
JOHANNESBURG, May 28 (Reuters) - South Africa's rand tumbled
to its weakest in three weeks on Tuesday as deputy president
David Mabuza was sworn in as a lawmaker after being cleared by
the ruling African National Congress of bringing the party into
At 1700 GMT the rand was 2.15% weaker at 14.7350
per dollar, its weakest level since March 28, after opening at
14.4225, with news of Mabuza's swearing in adding to a risk-off
tone globally after trade tensions resurfaced.
The move clears the way for 58-year-old Mabuza, an important
ally of President Cyril Ramaphosa, to remain his deputy, but
again throws a spotlight on corruption allegations that have hit
the party's popularity. Investors are keen to see proof of
Ramaphosa's clean governance pledge.
Mabuza denies any wrongdoing, and has said he wants all the
allegations levelled against him to be tested in a court of law.
"The rand outperformed its EM peers last week after
elections and was able to hold onto those gains because of the
positive politics and expectations about the new cabinet," said
BNP Paribas analyst Jeffrey Schultz.
"We've had delays to that announcement because of the Mabuza
issue so that outperformance has been eroded. The market is
anxious to see how small cabinet is going to be and what key
appointments like the finance ministry are going to be."
The ANC easily won this month's general election, but its
vote dropped sharply due to anger over corruption scandals.
Bonds also took a hit, with the yield on benchmark debt due
in 2026 8.5 basis points to 8.445 percent.
On the bourse, stocks traded weaker with the broader
All-Share index shedding 0.1% to 54,432 points, while
the Top-40 index declined 0.07% to 48,464 points.
Banking stocks fell 2.49% to 90.70 rand. Leading
the downside, Old Mutual continued to slip after
parting ways with its CEO Peter Moyo on Friday. The insurer
declined 4.51% to 20.34 rand, while financial firm FirstRand
fell 3.9% to 61.79 rand.
On the upside, Sibanye-Stillwater's rose 10.29% to
12.43 rand and South African-listed shares in Lonmin
lifted 11.86% to 12.07 rand after shareholders from both firms
approved a takeover deal that would create deal the world's
second-largest platinum producer.
"It's quite a big one, and it was well received," said Nick
Kunze, a portfolio manager at Sanlam Private Wealth.
(Reporting by Mfuneko Toyana and Onke Ngcuka; Editing by
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