South Africa's rand weakens on fragile global sentiment - CNBC Africa

South Africa's rand weakens on fragile global sentiment

Southern Africa

by Reuters 0

South Africa's rand weakens on fragile global sentiment. Photo: Wikimedia

South Africa's rand weakened in early trade on Friday, erasing gains of the previous session, as global risk aversion caused by fears over the health of the global economy on falling oil prices hit risk assets.

Stocks were however set to open slightly firmer at 0700 GMT, with the JSE securities exchange's Top-40 futures index adding 0.50 percent.

Today's big event in the local equities market is the listing of the world's largest brewer, Anheuser Busch InBev on the Johannesburg Stock Exchange after the Belguim-based brewer won over peer SABMiller in October.

The rand was 0.73 percent weaker at 16.5700 by 0650 GMT compared with Thursday's close of 16.4500.

China's fragile economy, lower oil prices and local fundamentals undercut sentiment in Africa's most advanced economy, analysts said.

"The rand has reattached to these global themes. It will not take much to get the rand moving again as the U.S., China, oil and local sentiment all provide meaningful risk," said Rand Merchant Bank currency strategist John Cairns.

Although the oil price decline is good for South Africa and the rand given that the commodity is the country's biggest single import, Cairns said "global sentiment is still very fragile."

In fixed income, the yield on the benchmark government bond maturing in 2026 shed 3 basis points to 9.630 percent.