#RandReport: Rand touches record low, stocks rise

The rand stumbled to 14.4400 to the dollar, its weakest on record according to Thomson Reuters data.

The rand has shaved off nearly 20 percent of its value against the dollar as prospects of higher US rates discourage investors. Picture: Facebook.

JOHANNESBURG - The rand ploughed a new all-time low against the dollar on Monday, weighed down by expectations the central bank will keep domestic rates unchanged this week, even as the United States (US) Federal Reserve looks set to tighten policy.

Stocks ended a touch higher, breaking a two-day losing run, with Tiger Brands among the top gainers after the consumer foods firm cut off funding to its money-losing Nigerian unit.

The rand has shaved off nearly 20 percent of its value against the greenback this year as prospects of higher US rates dents investor appetite for emerging market assets which offer higher yields but carry more risk.

The rand stumbled to 14.4400 to the dollar, its weakest on record according to Thomson Reuters data, and was at 14.3825 by 2:59pm, little changed from Friday's close.

The South African Reserve Bank holds its final policy meeting of the year on Thursday, and analysts polled by Reuters expect it to keep the benchmark repo rate unchanged at 6 percent.

"What's in the back of many investors' minds is that if we don't do anything to interest rates, which seems to be the consensus of the majority of the banks locally here, it could potentially be a very tough situation for the rand," Bidvest Bank chief dealer Ion de Vleeschauwer said.

"We're almost at 14,5000, so if they don't do anything to domestic interest rates and the Fed lifts off in December, 15,0000 is almost a certainty."

In fixed income, government bonds were mostly flat, with debt due in 2026 edging up half a basis point to 8.64 percent.

On the bourse, the blue-chip JSE Top-40 index gained 0.76 percent to 46,330 and the broader All-share index added 0.68 percent to 51,547.

Tiger Brands has cut off funding to Nigeria's Dangote Flour Mills as part of wider review of its investment in the loss-making flour and pasta maker.

In reaction, shares in the company jumped 5.47 percent to R328, booking their biggest daily percentage gain in more than two years.

"As far as the near-term time horizon is concerned, it would be an immediate uplift to the group's earnings growth profile just because just because Dangote was making quite significant losses," Avior Capital Markets' analyst Jiten Bechoo said.

MTN Group shares fell down 0.28 percent to 145.25 rand after the mobile phone group said Nigeria had pushed back a Monday deadline to pay a $5,2 billion fine for failing to cut off unregistered SIM cards pending the conclusion of talks with authorities over the penalty.

Telkom also featured among gainers, rising 6.9 percent to 63.18 rand, after the telecoms firm reported higher earnings and denied a report that it has had a R14 billion offer for smaller rival Cell C rejected.

Trade was robust with more than 222 million shares changing hands, well above last year's daily average of 183 million shares.