Rand weakens as dollar finds support

The rand weakened in early trade on Monday, as the safe-haven dollar benefited from a bid for safety by wary investors worried about rising interest rates and the risk of a global recession.

At 0626 GMT, the rand traded at R15.86 against the dollar, down 0.38% from its previous close.

The dollar index, which measures the currency versus six rivals, was slightly up at 104.050.

The dollar typically rises in times of uncertainty, as investors prefer dollar-denominated assets over higher-yielding, but riskier assets such as the rand.

On the Johannesburg stock market, investor attention will be on technology investors and market heavyweights Naspers and Prosus, following an announcement that they intend to sell down their stake in Chinese software giant Tencent Holdings to fund a share repurchase programme. Shares of Tencent fell 2.5% on the news.

Naspers has a majority stake in Prosus, which in turn holds 28.78% in Tencent. The South-Africa listed company reported a 16% drop in full-year profit on Monday.

The government’s benchmark 2030 bond was slightly lower in early deals, with the yield up 1.5 basis points to 10.275%.