Friday February 20, 04:26 PM
S.African stocks slide, rand weakens on global woes
JOHANNESBURG, Feb 20 (Reuters) - South African stocks slid more than 3 percent as Anglo American (LSE: AAL.L - news) tumbled after it
axed its dividend and missed profit forecasts, while the rand weakened on worries about the global economy.
The Top-40 index of blue-chip stocks dropped 3.41 percent to 17,464.05 points, its lowest level in more than 2 months, as persistent concerns about the health of the world economy dragged down major equity markets.
The broader All-share index fell 3.28 percent to 19,402.59 points.
'Anglo results are pulling the market down,' said Desmond Reilly, a trader at PSG Online Securities. 'The market in general is very negative from banks to industrials, they are following the global markets.'
Heavily-weighted Anglo American, which has its secondary listing in Johannesburg, sank 15.89 percent to 153.50 rand after it scrapped its dividend and said it would cut 19,000 jobs as it missed analyst expectations with a 1 percent fall in profit.
Financial stocks also took a beating, tracking their European peers lower as investors fretted about deeper losses in the sector due to a deepening economic downturn.
Standard Bank said it expected to report a 0-5 percent fall in headline EPS. Absa lost 6.11 percent to 86 rand, Standard Bank fell 5.26 percent to 63 rand, FirstRand shed 6.27 percent to 11.81 rand and Nedbank dropped 5.82 percent to 77.25 rand.
London-listed property firm Liberty International gave up 7.78 percent to 47.40 rand in Johannesburg amid worries about a possible capital rasising.
The rand weakened against the dollar, giving back the previous day's strong gains, as nagging worries about the gloomy global economic outlook kept investors away from risky assets.
The rand traded 0.69 percent weaker at 10.20 against the dollar at 1552 GMT compared with 10.13 at Thursday's close in New York.
The dollar, viewed by nervous investors as a relatively safe haven as the global crisis unravels, gained against major currencies on Friday, including the euro whose movements the rand generally tracks. The rand also took its direction from negative global equity markets.
'We have seen quite a lot of movement on the stock markets. Stock markets across across the globe have lost major ground, basically nothing less that 3 percent,' said Rand Merchant Bank trader Brigid Taylor.
'The Dow itself opened on negative territory. The upside risk remains that we could see rand weaken towards 10.30/dollar, but amazingly enough it actually hasn't yet materialised.'
On the local bourse, only gold and some platinum miners managed to push into positive territory as the bullion jumped to an 11-month high.
AngloGold Ashanti (Brussels: ANG.BR - news) pushed up 3.02 percent to 324.99 rand while Harmony added on 1.73 percent to 129.50 rand while Impala Platinum (Frankfurt: 164676 - news) rose 1.75 percent to 145 rand.
South African government bonds however rallied, and yields fell in turn, with the 2015 bond yield down 8.5 basis points at 8.00 percent while the 2036 note shed 9 basis points to 8.125 percent.
'There is a large sell of equities offshore and locally. In the U.S. they were talking about possible nationalisation of two major banks and your U.S. treasuries then rallied on the back of that,' a Johannesburg bond trader said.
'On the back of that and also just rising risk aversion yet again ... obviouslly our bonds came back in a big way. It's more to do with the offshore conditions which were detoriating.'
(Reporting by Zimkhitha Sulelo; Editing by Ian Jones) (For full Reuters Africa coverage and to have your say on the top issues, visit: http://af.reuters.com) Keywords: MARKETS SAFRICA/CLOSE
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