MTN: 6,428 0 (0.00%)
South Africa's rand falls after ECB, Eskom tariffs news
JOHANNESBURG, March 7 (Reuters) - South Africa's rand fell
on Thursday, tracking the euro lower after the European Central
Bank pushed back its forecast for an interest rate hike and
offered banks more cheap loans, while at home state power
utility Eskom got smaller tariff hikes than sought.
Stocks weakened as market heavyweight Naspers came
under pressure despite a jump in MTN's shares, which led gainers
across the bourse, after reporting a surge in annual profit.
At 1530 GMT, the rand was 1.44 percent weaker at
14.4750 per dollar, compared to a close of 14.2700 on Wednesday.
The European Central Bank changed tack on its tightening
plan on Thursday, pushing out the timing of its first
post-crisis rate hike until 2020 at the earliest and offering
banks a new round of cheap loans to help revive the euro zone
The rand has suffered since breaching the 14.00 level last
month as nationwide blackouts affecting ailing electricity firm
Eskom weighed on sentiment.
Energy regulator Nersa on Thursday granted cash-strapped
Eskom above-inflation power price hikes over the next three
years, but the increases were far below what the utility had
"Although not as steep as anticipated, the increase will
still put further pressure on the already constrained consumer,
with job cuts a possibility as electricity intensive industries
struggle to cope with elevated input costs," Investec economist
Lara Hodes said in a note.
The yield on the benchmark 10-year government issue
dipped 0.5 basis points to 8.675 percent.
On the bourse, the Johannesburg all-share index
fell 0.39 percent to 55,857 points, while the Top-40 index
closed 0.42 percent lower to 49,665 points.
Naspers fell 2.65 percent to 3,130 rand after Hong Kong
technology giant Tencent, which it has a 31 percent
stake in, weakened.
" has had a really strong run-up over the last few
weeks and has lifted Naspers up quite nicely so today is the
first day that Tencent has corrected a bit and drags Naspers
down," said portfolio manager at Independent Securities, Michele
Lender Standard Bank fell 3 percent to 182.43 rand
after it posted leaner full-year earnings.
Africa's biggest telecoms group MTN on the other
hand leaped 18 percent at 89.80 rand after the company reported
an 85 percent surge in headline earnings per share.
(Reporting by Olivia Kumwenda-Mtambo and Tanisha Heiberg;
Editing by Hugh Lawson)
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