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Markets WRAP: Rand closes at R14.73/$

2019-05-28 09:05

The rand lost more than 2% against the dollar.


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Last Updated at 02:08
28 May 17:34

The rand lost more than 2% against the greenback on Tuesday, ending the day at R14.73/$.

"Rumours abound as to what exactly is behind the move in the rand, ranging from Cabinet decisions to a stronger US dollar," commented TreasuryONE at the day's close. "The Rand broke through the key technical level of R14.6500 and is currently trading at R14.7300."

Here's how Tuesday afternoon wrapped up:

USDZAR 14.7005

EURUSD 1.1172

EURZAR 16.4152

GBPUSD 1.2672

GBPZAR 18.6192

AUDZAR 10.1794

CADZAR 10.9097

CNYZAR 2.1256

ZARJPY 7.4431

CHFZAR 14.5607

R186 8.44%

US 10 Year 2.28%

JSE 0.00%

FTSE n/a

S&P 500 0.24%

Gold 1 278.18 

Plat 798.37 

Plad 1 343.16 

Rhod 2 830.00 

Irid 1 470.00 R

Ruth 263.00 

Copp 5 956.50 

Brent 69.93 

Gold ZAR 18 786.09 

Plat ZAR 11 733.99 

Brought to you by TreasuryONE

28 May 14:11

Lonmin investors back Sibanye deal to create platinum giant

Felix Njini and Thomas Biesheuvel, Bloomberg

Lonmin investors have backed the platinum producer’s takeover by Sibanye Gold, bringing to an end a company that was once part of a business empire synonymous with British capitalism in Africa.

Sibanye’s all-share takeover was backed by 98.87% of votes cast at a meeting in London, based on provisional results, passing the required threshold of 75%.

The vote is a triumph for Sibanye Chief Executive Officer Neal Froneman, a prolific deal-maker who faced investor concerns that his offer undervalues Lonmin’s assets. Sibanye investors approved the deal earlier in the day.

Froneman, who had already seen off a challenge to the deal from Lonmin’s biggest labour union Amcu, will gain access to his rival’s processing facilities and some of the lowest-cost shafts in the industry.

The combined entity will challenge Anglo American Plc’s platinum business as the world’s biggest primary producer of the metal.

Lonmin agreed to an offer from Sibanye after struggling through years of losses and being forced to seek debt-covenant waivers from lenders. CEO Ben Magara backed the deal, saying that on its own Lonmin lacked the capital to invest in its operations.

SBG Securities, a unit of Standard Bank, said the transaction undervalues Lonmin’s assets by as much as $460 million.

Sibanye’s takeover draws the curtain on a company founded in 1909 to acquire mining rights in then Northern and Southern Rhodesia, now Zambia and Zimbabwe, to become one of Britain’s most prominent companies of the 20th century. Lonmin reconfigured from its predecessor Lonrho in the 1990s to focus on platinum mining.

28 May 10:54

Uncertainty around Cabinet delay starts to spook rand


The rand weakened in early trade on Tuesday, with uncertainty around the makeup of SA's Cabinet starting to filter into the forex market as the UK and US returned from public holidays on Monday. 

At 09:15 the local currency was trading at R14.52/$, down 0.7% on the day.  The rand opened at R14.42 to the greenback, after trading in a tight range on Monday. 

28 May 10:51

Brent oil's rebound fizzles as Trump not ready for trade deal

Saket Sundria, Bloomberg

Brent crude traded around $70 a barrel as a two-day rebound petered out on signs the US and China are still far from reaching a trade deal, while supply risks from the Persian Gulf to Venezuela kept investors wary.

Futures in London were steady after rallying 3.5% over Friday and Monday.

President Donald Trump said the US “isn’t ready” to make a trade deal with China, while reaffirming he’s not pursuing regime change in Iran. While that eased concern that oil flows will be disrupted, the situation remained tense as the Saudi Arabia-led coalition blamed Iran for supporting terror attacks.

Brent has now clawed back more than half of its trade war-induced tumble of around 6% over Wednesday and Thursday even though there hasn’t been any progress in resolving the conflict.

A drop in working US rigs to the least in a year has aided prices, and the supply backdrop is still rife with risks.

“I think the bounce we have seen in the last couple of days has taken the market by surprise,” said Michael McCarthy, chief market strategist at CMC Markets Asia Pacific Pty in Sydney. “While supply issues certainly remain, it’s the demand picture that’s unclear.”

28 May 09:21

Vodacom permit dispute threatens to disconnect Congo clients

Vodacom’s unit in the Democratic Republic of Congo will lose the right to provide 2G services this week unless it renews a disputed license, according to a government order. The directive threatens to disconnect some of Vodacom Congo’s 11.8 million customers who’ve yet to switch to 3G and 4G, or live in remote areas not yet covered by the faster data services.

28 May 09:06

Stocks drift, US yields near 19-month low

Andreea Papuc, Bloomberg

Stocks in Asia chalked up modest gains in thin trading, while European and US futures pointed to advances as traders returned from US and UK holidays.

Treasuries edged higher. Shares climbed in Japan, China and Hong Kong on lower-than-usual volumes due to the Memorial Day holiday in the US and a UK market closure Monday.

President Donald Trump’s declaration Monday that the US was “not ready” to reach a trade deal with China had little impact.

The yuan dipped as Tuesday’s session wore on. US 10-year yields approached their lowest levels since October 2017. The pound held losses as traders kept watch on the contest to choose Britain’s next prime minister amid the Brexit quagmire.

Investors are looking for fresh cues after trade frictions and soft economic data have put global stocks on course for their first monthly decline of 2019. Trump gave no indication of a let-up in tensions with China, saying during a visit to Japan that tariffs on Chinese goods “could go up very, very substantially, very easily.”

“You’re probably going to get this continued to-ing and fro-ing,” in US-China ties even if the tariff battle subsides, Catherine Yeung, Fidelity International Investment Director, said in an interview on Bloomberg TV.

Friction over top manufacturers “will likely weigh on market sentiment over the longer term,” she said as focus continues on the Trump administration’s moves to cut off US business with Chinese tech champions.

Elsewhere, crude oil rose above $59, and iron ore prices built on their recent rally.

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