Rand steadies, Sasol leads stocks higher
The rand steadied in late trade on Tuesday, struggling for momentum as fading optimism over the latest China-US trade truce weighed on risk appetite, while stocks rose, led by chemicals firm Sasol.
JOHANNESBURG - The rand steadied in late trade on Tuesday, struggling for momentum as fading optimism over the latest China-US trade truce weighed on risk appetite, while stocks rose, led by chemicals firm Sasol.
At 1510 GMT, the rand traded at R14.8450 per dollar, not far off its close of R14.8350 on Monday.
“The markets are in see-saw mode as it is apparent that the interim deal between the US and China might not be as conclusive as initially thought, with the deal not even in writing yet,” said Bianca Botes, treasury partner at Peregrine Treasury Solutions.
The United States on Friday outlined the first phase of a trade deal and suspended this week’s scheduled tariff hikes on Chinese goods. Bloomberg reported on Monday that China wanted more talks to hammer out the details of the phase-one deal before signing it.
Focus in markets was also on the Brexit talks, in the absence of domestic catalysts.
Officials from Britain and the EU will meet at a make-or-break summit on Thursday and Friday that will determine whether Britain is headed for a deal to leave the bloc on 31 October, a disorderly no-deal exit or a delay.
In the equities market, Sasol jumped to a more than three-week high after it gave a definite date on which its 2019 results will be released and said it had completed its review into cost overruns at its Lake Charles project in the US.
Sasol, whose share price has lost a third of its value so far in 2019, closed 4.85% firmer at R287.93.
Technology service provider EOH Holdings Ltd ended the session up 4.40% at R12.52 after it said it had blacklisted and suspended payments to 50 enterprise development partners it says were implicated in nearly R1 billion ($67.36 million) of suspicious transactions.
The Johannesburg-based company’s chief executive officer, Stephen van Coller, has been trying to clean up the firm from alleged corrupt dealings by EOH employees and fix a number of governance issues mentioned in a wide-ranging probe by law firm ENSafrica.
“The market is taking the view that management are doing everything that they can with regards to cleaning up the mess that seems to have been left there with tender irregularities, fraud and things from the previous management,” Independent Securities trader Ryan Woods said.
“The market is sort of saying ‘okay we’ll give you the benefit of the doubt for now and let’s see how this goes’ and as a result we’re seeing a little bit of buying coming into the market today.”
The Johannesburg All-Share index rose 0.57% to 55,532 points, while the Top-40 index climbed 0.57% to 49,391.
In fixed income, the yield on the benchmark government bond due in 2026 was up 0.5 basis points at 8.23%.