June 22, 2019 / 5:21 PM / 8 months ago

S.African rand inches back up in wake of Ramaphosa speech, stocks slide

JOHANNESBURG (Reuters) - South Africa’s rand firmed up slightly on Friday, clawing back some of its losses following President Cyril Ramaphosa’s state of the nation address, which some analysts said lacked detail on how he plans to fix the flagging economy.

South African bank notes featuring an image of former South African President Nelson Mandela are displayed at an office in Johannesburg, file. REUTERS/Siphiwe Sibeko

At 1600 GMT the rand was 0.07% firmer at 14.3450 per dollar compared to a session-low of 14.4450.

On Thursday evening, in his first state of the nation address since leading his party to victory in a May 8 election, Ramaphosa pledged to grow the economy, create jobs and reaffirmed a commitment to land redistribution.

Ramaphosa also pledged to speed up 230 billion rand ($16 billion) of support for struggling power utility Eskom.

“The State of the Nation (SONA) address is not usually a forum for detailed policy announcements. Overall, an encouraging message, but now we need action and implementation as the country,” by Johann Els, chief economist at Old Mutual Investment Group.

Bonds weakened, with the yield on the benchmark government bond due in 2026 up 7 basis points to 8.12%.

On the bourse, stocks fell, dragged lower by the Ramaphosa disappointment and after the U.S military threatened a strike against Iran, chilling investors already worried by trade tensions between Washington and Beijing.

The Johannesburg Stock Exchange’s benchmark Top-40 Index slipped 0.11% to 52,902.88 while the broader All-Share Index closed 0.05% lower at 58,941.47.

Retailer Shoprite and pharmaceuticals specialist Clicks were the biggest losers on the blue-chip index, with Shoprite down 6.36% to 164.74 rand while Clicks fell 2.39% to 214.32 rand.

Embattled telecommunications company Vodacom Group fell 0.71% to 125.37 rand after announcing that it had entered into agreements to sell some of its Business Africa operations, which offer business-managed services to enterprises.

Newly-listed pay-for-TV service Multichoice said on Friday it had notified workers of plans to lay off 1,790 employees.

The company’s profit margins have nosedived in the face of competition from digital services like Netflix looking to gain traction in the African market.

($1 = 14.3332 rand)

Reporting by Mfuneko Toyana and Naledi Mashishi; Editing by Hugh Lawson

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