NASPERSN: 344,843 -3657 (-1.05%)
South Africa's rand firms after GDP data, stocks weak
JOHANNESBURG, March 5 (Reuters) - South Africa's rand firmed
on Tuesday after data showing an economic recovery from a
recession continued in the fourth quarter of last year, albeit
at a slower rate.
Stocks weakened as the GDP figure was below market
At 1500 GMT, the rand was 0.42 percent firmer at
14.1400 per dollar, compared to its close of 14.2000 on Monday.
South Africa suffered a recession in the first half of 2018
as farming plunged after a drought, but growth has since
The economy grew 1.4 percent in October-December 2018, after
expanding by a revised 2.6 percent in the third quarter,
Statistics South Africa said.
"Q4's growth outcome signalled that the South African
economy has muddled along, very slowly on the mend," said Elize
Kruger, an economist at NKC African Economics.
"Clearly the economy is nowhere close to being out of the
woods yet, with sporadic load shedding, higher fuel prices, a
higher tax burden and a moderating global economy weighing on
much-needed improvements in confidence levels," she added.
The Treasury has projected that the economy will grow 1.5
percent this year. But risks such as electricity supply
shortages remain after struggling power utility Eskom resumed
nationwide electricity cuts late in February.
Bonds firmed, with the yield on the benchmark paper due in
2026 dipping 6 basis points to 8.665 percent.
In equities, the local market shrugged off the GDP data as
it opened in the green before losing all its steam at 0730 GMT
and drifting lower for the rest of the trading session, with the
Johannesburg All-share index closing 0.71 percent lower
at 55,815 points.
The Top-40 index closed 0.62 percent weaker at
"The GDP data we had out earlier was probably a little bit
disappointing," said Cratos Capital equities trader Greg Davies.
Refinitiv's consensus forecast was for growth of 1.6 percent
Davies also blamed market heavyweight Naspers for
the weakness after it gave away its earlier gains.
"A share like Naspers, which was positive this morning, has
pulled all the way back in the last hour of trade. It started
with Naspers pulling us down and it pulled more and more sellers
into the market," Davies added.
Naspers closed 0.06 percent weaker at 3,155 rand after
rising more than 3 percent earlier.
(Reporting by Olivia Kumwenda-Mtambo and Nqobile Dludla,
editing by Ed Osmond)
© 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.