Rand Falls Third Day as Foreign Investors Sell Bonds, Equities

The rand weakened for a third day as foreign investors sold the most government bonds since October.

South Africa’s currency fell much as 0.2 percent and traded less than 0.1 percent weaker at 8.8850 per dollar at 9:38 a.m. in Johannesburg. The rand dropped 1.8 percent last week, the worst of 25 emerging-market currencies monitored by Bloomberg. Yields on 10.5 percent bonds due December 2026 rose two basis points, or 0.02 percentage point, to 7.25 percent after jumping seven basis points last week.

Foreign investors sold a net 3.3 billion rand ($372 million) of bonds Jan. 18, the most since Oct. 8, for net sales last week of 2.42 billion rand, according to JSE Ltd., operator of the stock and bond exchanges. Foreigners sold a net 3.77 billion rand of equities last week, according to Bloomberg calculations. Plans by Anglo American Plc (AAL)’s platinum unit to fire workers amid ongoing labor unrest in the mining and agricultural industries are weighing on sentiment.

Selling of South African assets “could simply be part of the normal to and fro but obviously raises the question of whether investors have started to lose faith in our economy again,” John Cairns, a currency strategist at Rand Merchant Bank in Johannesburg, said in e-mailed comments.

The country’s purchasing managers’ index unexpectedly fell in December, declining to 47.4 from 49.5 in November, Kagiso Tiso Holdings said on Jan. 16. The median estimate of economists surveyed by Bloomberg was for the index to rise to 50.2.

To contact the reporter on this story: Stephen Gunnion in Johannesburg at sgunnion@bloomberg.net

To contact the editor responsible for this story: Vernon Wessels at vwessels@bloomberg.net

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