South Africa's rand weighed down by cenbank row, stocks weak


Reuters

UPDATE 1-South Africa's rand weighed down by cenbank row, stocks weak


* Watchdog wants to axe cbank's mandate on currency, price
    * Rand down 0.75 pct
    * Mining shares hit by new rules on mine ownership

 (Adds stocks, quote, updates levels)
    JOHANNESBURG, June 20 (Reuters) - South Africa's rand
extended its losses against the dollar on Tuesday as jittery
investors sold the currency after a recommendation by the
anti-graft watchdog to remove the central bank's mandate of
maintaining currency and price stability.
    At 1511 GMT, the rand <ZAR=D3> traded at 13.0900 per dollar,
0.75 percent weaker than its New York close on Monday.
    The unit fell as much as 1.6 percent against the dollar on
Monday when Public Protector Busisiwe Mkhwebane, head of South
Africa's constitutionally-sanctioned anti-graft watchdog, said
the South African Reserve Bank should be more concerned about
citizens and less about the currency. [nL8N1JH0JX]
    "What really concerned the market is that the report seems
to be an attack on an institution that is sacrosanct in the eyes
of foreign investors," Standard Bank chief currency trader
Warrick Butler wrote in a note.
    S&P Global Ratings said South Africa's rating could be cut
deeper into junk territory if the government meddles with the
central bank's "critical" independence. [nL8N1JH3RW]
    In fixed income, the yield for the benchmark government bond
due in 2026 <ZAR186=> was down 0.5 basis points to 8.54 percent.
    Stocks weakened on the bourse, weighed down by resource
shares that have fallen since the government raised the minimum
threshold for black ownership of mining companies to 30 percent
from 26 percent last Thursday. [nL8N1JC1YI]
    The Chamber of Mines, which represents mining firms, said it
would challenge the new rules in court, while ratings firm Fitch
said the new regulations will deter investment. [nL8N1JG5BR]
    "There is a lot of nervousness around it, nobody likes
uncertainty, markets hate that," said Independent Securities
trader Ryan Woods.
    Harmony Gold <HARJ.J> weakened 6 percent to 21 rand and
Impala Platinum <IMPJ.J> also fell 6 percent to 34 rand. Anglo
American <AGLJ.J> fell 3 percent to 159 rand.
    The Johannesburg All-share index <.JALSH> fell 0.9 percent
to 51,161 points, while the benchmark Top-40 index weakened 0.91
percent to 44,970 points.

 (Reporting by Nqobile Dludla and Olivia Kumwenda-Mtambo;
Editing by James Macharia)
 ((nqobile.dludla@thomsonreuters.com; +27117753126; Reuters
Messaging: nqobile.dludla.thomsonreuters.com@reuters.net))

Keywords: SAFRICA MARKETS/ (UPDATE 1)



This article appears in: Politics , Stocks
Referenced Symbols: AGLJ , HARJ , IMPJ


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