Rand firmer after Ramaphosa's speech, stocks flat
Cyril Ramaphosa acknowledged in an annual address to parliament on Thursday evening that growth had stalled, exacerbating high levels of unemployment and increasing hardship for millions of citizens.
JOHANNESBURG – The rand firmed on Friday after President Cyril Ramaphosa set out brief plans to stimulate economic growth during his state of the nation address, although his speech was short on specifics and timeframes.
At 1515 GMT the rand was 0.49% stronger at 14.8800 per dollar.
Ramaphosa acknowledged in an annual address to parliament on Thursday evening that growth had stalled, exacerbating high levels of unemployment and increasing hardship for millions of citizens.
He said that his government would shortly issue plans to procure more power and increase generating capacity outside struggling power utility Eskom.
Eskom supplies more than 90% of South Africa’s electricity but is struggling with high debts and power stations in need of refurbishment.
The utility has been forced to impose several rounds of severe power cuts in the past year that have dented the country’s economic growth.
“The key positive statements of (Ramaphosa’s speech) surrounded increasing the supply of available electricity and the reduction of government spending,” said Kamilla Kaplan of Investec.
Kaplan added that although the speech did not contain new decisive growth-enhancing policy initiatives, “the tone suggested an impetus to get structural reforms underway”.
Stocks closed flat, with the Johannesburg Stock Exchange’s Top-40 index 0.01% up to 52,049.98 points and the broader all-share index up 0.05% at 57,861 points.
The biggest winner on the blue-chip index was miner Sibanye-Stillwater, which closed 6.9% higher after flagging that its full-year headline loss was set to shrink, with adjusted EBITDA growing 79% year-on-year.
In fixed income, the yield on benchmark 2030 paper was down 3 basis point to 8.865%.