South Africa’s rand steadies, stocks to open higher

by Reuters 0

JOHANNESBURG (Reuters) – South Africa’s rand steadied early on Monday after selling in the previous session as rising interest rates in the United States weakened demand for emerging market currencies.

At 0637 GMT, the rand traded at 12.7925 per dollar, compared with its New York close of 12.8050 on Friday.

“The strong dollar, combined with continued media headlines related to the Mining Charter, makes us believe the rand is biased for weakness,” Rand Merchant Bank analyst Isaah Mhlanga said in a note.

The revised Mining Charter issued by the government on Thursday raised the minimum threshold for black ownership of mining companies to 30 percent from 26 percent and gave companies 12 months to meet the target, hitting mining stocks and the rand.

Focus this week on first-quarter current account data due out on Tuesday and May consumer price inflation numbers to be released on Wednesday.

Stocks were set to open higher at 0700 GMT, with the JSE securities exchange’s Top-40 futures index up 0.51 percent.

In fixed income, the yield for the benchmark government bond due in 2026 dipped 1 basis point to 8.475 percent.

(Reporting by Olivia Kumwenda-Mtambo; editing by John Stonestreet)