South Africa's rand rides optimism over new power plan

(Updates to reflect afternoon trade)

JOHANNESBURG, Oct 18 (Reuters) - South Africa's rand firmed on Friday, building on gains made after the government released a long-delayed plan for electricity generation to address crippling power cuts.

At 1620 GMT, the rand was up 0.3% at 14.7900 per U.S. dollar.

The South African currency rallied from near 15.00 to a session-best 14.77 on Thursday, ending a losing streak triggered by state power utility Eskom's resumption on Wednesday of nationwide controlled blackouts.

Eskom has blamed unforeseen breakdowns at some of its coal-burning plants, but analysts say they are a symptom of mismanagement over many years, which has seen it sink into roughly 440 billion rand ($30 billion) of debt.

The release of the new electricity generation plan, replacing a previous blueprint not updated for almost a decade, gave investors a degree of policy certainty, but Eskom still does not have a permanent chief executive.

South African government bonds traded slightly firmer, with the yield on the benchmark government paper due in 2026 down 2 basis points at 8.24%.

Stocks closed weaker, with the Johannesburg All-share index down 0.48% to 55,723 points, while the benchmark Top-40 index declined 0.41% to 49,511 points.

Bank stocks fell as the index edged 1.24% lower. FirstRand slipped 1.89% to 65.99 rand, Standard Bank shed 1.44% to 179.20 rand and Rand Bank Merchant lost 1.02% to 80.17 rand.

Gold stocks shone with the index up 1.76% amid global market uncertainty. Harmony rose 3.41% to 46.96 rand and AngloGold America 2.02% to 306.70 rand. (Reporting by Mfuneko Toyana and Onke Ngcuka; Editing by Alexander Smith)

First Published: 2019-10-18 08:54:07
Updated 2019-10-18 18:38:00

© 2019 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.