Rand retreats in the wake of the Ramaphosa speech, stocks slide



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On Thursday night, in his first nationwide address since leading his party to victory in the May 8 election, Ramaphosa vowed to boost the economy, create jobs, and reaffirm the commitment to redistribute land.

Image: EWN.

JOHANNESBURG – The rand tightened slightly on Friday, recovering some of its losses after President Cyril Ramaphosa's speech about the state of the nation, which some analysts say had no details about how he intends to repair the declining economy.

At 16:00 GMT, the rand was 0.07% firmer, at 14.3450 per dollar, compared with a session low of 14.4450.

On Thursday night, in his first nationwide address since leading his party to victory in the May 8 election, Ramaphosa vowed to boost the economy, create jobs, and reaffirm the commitment to redistribute land.

Ramaphosa also pledged to accelerate the 2.2 billion rand ($ 16 billion) in support of Eskom, a troubled power company.

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

Bonds weakened, with government benchmark yields maturing in 2026, rising 7 basis points to 8.12%.

In the stock exchange, stocks plummeted, plagued by Ramaphosa's disappointment and after the US military threatened an attack on Iran, scaring investors already worried about trade tensions between Washington and Beijing.

The Top-40 benchmark of the Johannesburg Stock Exchange fell 0.11% to 52,902.88, while the All-Share index closed 0.05% to 58,941.47.

Retailer Shoprite and the specialist in pharmaceuticals Clicks were the biggest losers in the blue-chip index, with Shoprite falling 6.36% to R $ 164.44, while Clicks fell 2.39% to R $ 14.12 .

Vodacom Group, a struggling telecommunications company, fell 0.71 percent to 125.37 rand after announcing that it had entered into agreements to sell some of its operations in Africa that provide business-to-business services.

Multichoice announced on Friday that it had notified workers about plans to lay off 1,790 employees.

The company's profit margins plummeted in the face of competition from digital services such as Netflix, which seek to gain strength in the African market.

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