South Africa's rand heads for monthly loss, stocks flat

JOHANNESBURG: South Africa's rand was set to end the month on a weaker footing after domestic political concerns and the global trade conflict hurt sentiment, while stocks traded flat.

At 1616 GMT the rand was 0.95% firmer at 14.6000 per dollar, thanks to a weaker greenback on the day, but the currency was heading for a more than 2% monthly loss.

The rand hit a 5-month low earlier this week as markets anxiously waited for President Cyril Ramaphosa to select a new cabinet.

"Some concerns over politics in South Africa, particularly the delay in appointing cabinet members, were seen to have contributed to rand weakness, but the elevation in global markets risk-off sentiment is likely to have also been a key reason for the marked depreciation of the rand," said Investec's chief economist Annabel Bishop.

"The currency is likely to remain beholden to developments in trade negotiations between China and the US, and is expected to see continued volatility this quarter and next with the sell-in-May-and-go-away effect remaining a risk."

Ramaphosa announced his smaller cabinet late on Wednesday, which was well received by markets, following on from a pre-election pledge to reform and revive an ailing economy and attract foreign investors.

Investors are now looking ahead to first-quarter economic growth figures due on Tuesday, with increasing chance growth contracted after slumps in mining and manufacturing.

The central bank last week cut its 2019 economic growth forecast to 1.0% from the 1.3%, and said a first quarter GDP contraction was likely.

In fixed income, the yield on the benchmark 10-year government bond traded flat at 8.485%.

On the bourse, stocks closed weaker as geopolitics got in the way of local markets, with the broader All-Share index down 0.09% to 55,650 points, while the Top-40 index weakened 0.16% to 49,587 points.

The second-biggest decliner on the bourse was sugar producer Tongaat Hulett, which fell 7.73% to 16.70 rand after the firm said its 2018 results could face a hit of up to 4.5 billion rand ($308 million).

Also on the downside was petrochemicals company Sasol , which fell 3.02% to 366.59 rand after ratings agency Moody's changed its outlook from stable to negative.

Leading the Top-40 index was budget retailer Mr. Price , up 11% to 197.15 rand, after full-year earnings showed a 6.2% increase.