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Markets WRAP: Rand closes at R13.89/$

2019-07-15 09:57

The day's range was between R13.85 and R13.97.

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Last Updated at 02:22
15 Jul 17:08

The rand closed at R13.89 to the greenback on Monday afternoon.

The day's range was between R13.85 and R13.97.

15 Jul 16:09

The pound is at its weakest ever for this time of year and if seasonality is any guide, it could get even worse in August. Sterling hit a two-year low against the dollar this month and has suffered a record run of weekly losses versus the euro.

Seasonal patterns show it has fallen against the greenback for the past five years in August and against the common currency for four of those.

August sees risk averse trading conditions, according to MUFG strategist Lee Hardman.

Holiday Blues

This August, investors will face a replacement for Prime Minister Theresa May who is likely to choose a new chancellor and raise the prospect of the UK crashing out of the European Union if no Brexit deal is reached. With a divided Parliament on recess for the summer holiday, time is running out before the deadline to leave the bloc.

“It is a low volume month generally, so moves may be exaggerated,” said Royal Bank of Canada’s chief currency strategist Adam Cole. “We’ll have enough to worry about in August anyway, with a new prime minister and as we edge closer to October 31.”

The pound fell 0.3% to 89.90 pence per euro and $1.2533 by 14:40 in London, having fallen 4% in the past three months to be the worst-performing major currency. It may extend the slide to 92 pence per euro by September or October, according to ING Groep NV strategist Chris Turner, who sees Boris Johnson as leader failing to get a new agreement with Brussels and heading into autumn on a “no-deal ticket”. - Bloomberg

15 Jul 15:12

Telkom announces new non-executive director

Telkom announced on Monday that Keith Rayner has been appointed to its board as a non-executive director with effect from July 15, 2019.

"Mr Rayner is a qualified Chartered Accountant (SA) with a wealth of experience in corporate finance, having started his corporate finance career in 1987. Over the years, he has advised numerous listed companies on various types of corporate finance transactions," said Telkom in a note.

Rayner is currently the chief executive officer of KAR Presentations, which Telkom described as an advisory and presentation corporation, which specialises in corporate finance and regulatory advice and presentations. 

15 Jul 12:10

Oil trades near $60 on storm disruption as glut concerns linger

Saket Sundria and Alex Longley, Bloomberg

Oil traded near $60 a barrel after a storm shut almost three-quarters of US Gulf of Mexico crude production, even as lingering demand concerns continue to dent the outlook. Futures rose 0.2% in New York.

About 73% of crude output in the Gulf of Mexico was halted as of Sunday but some producers are preparing to return workers to offshore platforms as storm Barry weakens after making landfall.

The shutdown countered the impact of China’s economy slowing to a three-decade low in the second quarter amid a prolonged trade dispute with the US.

Crude has gained this month because of shrinking US stockpiles and rising tensions in the Middle East.

The UK and its allies are considering beefing up their military presence in the Persian Gulf to deal with the threat to shipping posed by Iran. Still, there are concerns over the longer-term outlook for the oil market with OPEC warning of a glut in 2020 while the IEA pointed to a surprise increase in global inventories in the first half of this year.

“The basic message is that the second half of this year will see some depletion in global oil inventories but this will be followed by a dismal 2020,” PVM Oil Associates analyst Tamas Varga wrote in a report.

West Texas Intermediate for August delivery added 12 cents to $60.33 a barrel on the New York Mercantile Exchange as of 10:47 a.m. London time.

Brent for September settlement was 24 cents higher at $66.96 a barrel on the ICE Futures Europe Exchange. The benchmark crude traded at a premium of $6.53 to WTI for the same month.

15 Jul 11:08

Old Mutual backs Footgear’s plans to buy Edcon’s active stores - Bloomberg 

Old Mutual's private equity arm is backing a plan by Footgear to buy a unit of Edcon in Southern Africa to create one of the region’s largest sports and casual wear businesses.

Footgear plans to combine Edcon’s Edgars Active and High Key assets and rebrand existing stores under the Footgear name, in which Old Mutual holds a majority stake. The deal would be funded from a R3.7bn fund ($265m) previously raised by the Johannesburg-based insurer.

15 Jul 10:43

The rand has continued to hold below the R14.00/$ mark.

By 10:42, the local unit was changing hands at R13.90 to the greenback.

"The rand is still holding below the R14.00/$ mark, with the US rate cut anticipation underlying the strength," said Peregrine Treasury Solutions's Bianca Botes.

"Chinese GDP released this morning was in line with expectations but, at 6.2% year-on-year in Q2 2019, indicated a slowdown in growth to levels last witnessed in 1992. The rest of the day is quiet on the data front, while markets will start focusing on the MPC rate decision due to take place on Thursday."

15 Jul 09:58

European, Asian stocks rise in busy week of earnings

Adam Haigh and Laura Curtis

European shares and US equity futures climbed alongside stocks in Asia at the start of a busy week for Federal Reserve speakers, corporate earnings and economic data.

Chemicals and automaker shares led the Stoxx Europe 500 higher while S&P 500 contracts advanced to a fresh record level.

Asian stocks rebounded from early losses, and the Australian dollar hit its highest in more than a week after indicators showed that China’s economy is stabilising.

Japanese markets were shut for a holiday, subduing trading in the region. Ten-year Treasuries slipped while most European bonds nudged higher. WTI crude oil held steady at about $60 a barrel.

15 Jul 09:58

Bitcoin tumbles as Trump critique tests stellar run for 2019

Joanna Ossinger, Bloomberg 

Bitcoin slumped in another large weekend move after US President Donald Trump’s criticism of cryptocurrencies late last week put the focus back on this year’s jump in prices.

The largest cryptocurrency has tumbled 15% since Friday to trade at $10 028.55 as of 8:54 a.m. in Hong Kong, after briefly falling as low as $9,980. Other coins also retreated: Ethereum dropped 23% and Litecoin fell 17%.

Bitcoin initially climbed 6.8% on Friday after Trump’s comments, but has since more than erased the gains. Trump wrote on Twitter Thursday that he is “not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air,” adding that “unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity.”

He also criticised Facebook’s plans for the Libra digital currency.Bitcoin “continues to trade lower as comments from President Trump put downward pressure on the cryptocurrency,” said Alfonso Esparza, senior market analyst at Oanda in Toronto.

Drawing Trump’s ire does mean “it could fall further to $8 000, giving back all the gains made in June.”

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