JOHANNESBURG: South Africa's rand weakened on Monday, bowing to a firming dollar and growing concerns over possible credit downgrades of the country's local-currency bonds to 'subinvestment' at the end of the week.
Stocks rose, led by retailer Mr Price which reported a jump in interim profits.
At 1445 GMT the rand had weakened 0.45 percent to 14.0350 per dollar compared to last Friday's close at 13.9725 in New York, with traders opting to unwind long positions on the local currency and to buy dollars while they remained cheap.
Risks are focused on Friday's expected ratings announcements by S&P Global and Moody's.
Both currently have South Africa's local bond rating a notch above "junk". Downgrades are likely to trigger outflows of up to 180 billion rand ($12.83 billion), the central bank says.
"If by some miracle the agencies decide not to downgrade us, the level of euphoria will certainly be felt and this could see the rand retrace all the way to its medium-term support level at 13.10/15 over the next few weeks," said Standard Bank chief trader Warrick Butler in a note.
Bonds were weaker, with the benchmark government issue due in 2026 adding 8.5 basis points to 9.425 percent, as a combination of ratings fears and bets of a hawkish policy stance by the Reserve Bank when its decides on rates on Thursday.
On the bourse, the benchmark Top-40 index rose 0.78 percent to 54,327 points, while the All-Share index nudged up 0.62 percent to 60,501 points.
Retailer Mr Price rose 3.68 percent to 201.99 rand after reported a 24 percent rise in half-year profit.
The biggest gainer on the bourse was heavyweight Naspers, which holds a 33 percent stake in Hong Kong-listed Tencent.
It gained 3.90 percent to 3995.01 rand, buoyed by gains for the Chinese gaming giant.
Further gains were curbed by private healthcare operator Netcare, which fell 2.78 percent to 22.36 rand after it said it would restructure its operations in Britain following a drop in annual profit.
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