News Column

Rand, stocks fall as platinum strike scares investors

February 3, 2014

The Top40 index closed 0.25 percent lower at 40 586.73 while the all share index edged down 0.1 percent at 45 132.10. Shares of world number one platinum producer Anglo American Platinum fell 3.75 percent to R442.71, coming off an almost 12-month high on Thursday. Impala Platinum fell 3.8 percent to R115.44. "The quicker we can get a resolution, not only in the platinum sector but the whole mining sector, the sooner we will see platinum miners regain lost territory," said Paul Chakaduka, a trader from Global Trader. Platinum's price headed for a second consecutive weekly drop despite the strikes that have hit about 40 percent of global output, with no end in sight with the two sides poles apart on the wage issue. The rand reached new five-year lows in the past week as money moved out of developing countries while the Reserve Bank raised interest rates by 50 basis points on Wednesday, a further hit to investor confidence. At 5pm on Friday , the rand was at R11.2475 to the dollar, down 8.73c from its bid at the same time on Thursday, though it firmed slightly earlier in the session after data showed South Africa recorded a R2.78 billion trade surplus in December, up from R770 million the month before. "It seems to be settling in ranges for now but still very much emerging market headline driven," Rand Merchant Bank foreign exchange trader Jim Bryson said. In a volatile week which saw investors shun emerging market assets and the US Federal Reserve cut its monthly bond purchases by a further $10bn , the rand swung between a high of R10.905 and a five-year low of R11.39. Ongoing strikes in the platinum mining sector have also kept the rand under pressure. "The danger is that we re-test R11.38," Bryson said. Pretoria News

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Source: Pretoria News (South Africa)

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