#RandReport: Rand weakens, Shoprite tops stocks index

The rand weakened on Tuesday with Shoprite topping the Blue-chip index after the retailer reported a rise in half-year profit.

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JOHANNESBURG - The rand weakened on Tuesday, while stocks were little changed, with Shoprite topping the Blue-chip index after the retailer reported a rise in half-year profit.

The rand traded at R13.1475 per dollar at 15.02 GMT, down 0.71% from Monday’s New York close of R13.0550, while the yield on the benchmark government bond due in 2026 was down 1 basis point at 8.790%.

“The main driver today has been quite significant dollar strength and it appears that the fresh support for the dollar is stemming from hawkish speculation regarding Fed policy,” ETM Analytics market analyst Jana van Deventer said.

The dollar rose broadly on Tuesday after two Federal Reserve policymakers pointed to a potential US interest rate rise next month, turning attention to the bullish fundamentals of the world’s biggest economy.

Investors were also cautious ahead of Finance Minister Pravin Gordhan’s annual Budget Speech on Wednesday, amid renewed fears of a cabinet reshuffle.

“Despite this latest sell-off, the rand is still relatively resilient,” Deventer added.

South African stocks were little changed, with retailer Shoprite and Steinhoff leading the gainers as investors continued to digest the collapse of their merger talks on Monday.

The All-Share Index inched up 0.05% to 52,586 points, while the Johannesburg’s benchmark Top-40 index gained 0.11% to 45,556 points.

Shoprite closed 3.52% higher at R194.62 after the retailer reported a 15.5% jump in half-year profit, buoyed by sales growth in Angola and Nigeria.

Steinhoff’s Johannesburg-listed shares rallied further after it called off talks with Shoprite, calming investor nervousness. Its shares strengthened 2.70% to R72.

“There was a lot of uncertainty involved in that deal on how they were going to get the one with the other, I think after the talks fell through that uncertainty fell away and the investors like the fact that they get to have their independence again,” BP Bernstein trader Vasili Tirasis said.

Among the gainers, shares in Johannesburg-listed BHP Billiton gained 1.03% to R229.06 after the mining giant reported a sharp rise in underlying first-half net profit and a bigger than expected dividend.