Rand weaker as Eskom hurts sentiment

The rand stretched losses early on Tuesday, with sentiment dampened after state power firm Eskom reported a R2.3 billion ($171 million) loss, with emerging market investors looking elsewhere for returns.

At 08:30 GMT, the rand was 0.26% weaker at 13.49 per dollar.

After a brief rally at the end of the previous week the currency is back on the ropes, pressured by the patchy domestic growth outlook and ongoing uncertainty about global trade, which has seen investors seek out safety in developed markets.

On Monday Eskom, which supplies more 90% of the country’s power and survives on R270 billion of state-guaranteed debt, released financial results showing it still remains a major threat to any economic turnaround.

Read: Loss-making Eskom’s going concern status questioned

While the rand managed to hold below the 13.50 mark, a recent sell target for investors weary of the currency’s volatile swings, traders said it was likely breach the mark this week.

Bonds were also weaker, with the yield on the benchmark paper due in 2026 up 1 basis point to 8.78%. 

Source: moneyweb.co.za