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Finance - News around Africa - Profiles - March 9, 2020

JSE: Rand Takes a Fall

JSE Rand Falls
JSE: Rand Takes a Fall

Collapsing Asian markets hits the Johannesburg Stock Exchange (JSE) causing a fall in Rand on Monday morning, due to the coronavirus outbreak, and the slumping oil price stemming from the dispute between Russia and Saudi Arabia.

In risk-off trade, the Rand fell 3.38 percent to R16.9210/$, haven earlier dropped to R16.996. This has put the local currency at a four-year low.

The breakdown in negotiations between the OPEC and Russia over the production cuts on Friday sent oil prices plunging. It is speculated that Saudi Arabia is abandoning a strategy of supporting prices in favour of a grab for market share. Saudi Arabia’s slashing of oil price at the weekend confirmed this, leading to a further crash in oil prices.

In morning trade on Monday, Brent crude fell 29.51 percent to $32.11 a barrel. Gold was down 0.43 percent to $1,666.80/$ while platinum was down 2.89 percent to $874.20, thus sealing the fall of the Rand at the JSE.

Axicorp Chief Market strategist, Stephen Innes in a note said,
“Complete pandemonium at the open as investors wake up shell shocked to the realisation that last night’s risk meltdown nightmare wasn’t just a bad dream”.

In morning trade on Monday, the Hang Seng was down 3.5 percent and Japan’s Nikkei 5.32 percent. Tencent, which influences the JSE via its largest shareholder Naspers, had lost 3.23 percent.

There have been no local economic releases on Monday, while global data releases are likely to be put-aside due to the threats of the oil price war and the coronavirus outbreak.

“In this environment, data will have little effect on currency markets as moves as big as 10 percent were witnessed in the overnight session,” Peregrine Treasury Solutions corporate treasury manager Bianca Botes said in a note.

Documents storage company, Metrofile –  a JSE listed company, is expected to report a rise in profit for its six months to end-December later in the day but has provided no information on why this is the case.

READ ALSO: South Africa’s rand edges weaker in early trade

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