OWN CORRESPONDENT, Johannesburg | Wednesday
THE rand took a fresh beating on Tuesday, hitting its lowest level in weeks against the dollar and a new record low against the pound as speculators entered the fray on rumours about a delay in the much awaited Telkom initial public offering (IPO).
The government denied the rumour, saying the IPO was still on track for the fourth quarter of 2001, but the damage had already been done, dealers said.
”We think that we are on course to do the listing as anticipated for the fourth quarter of the year,” said Fani Zulu, communications head at the Department of Public Enterprises. ”At this stage we have no reason to talk about delay or postponement.”
Fears that the listing may be delayed were stirred by local media reports that it could be moved to the first quarter of 2002.
”Once these guys see a sign of weakness they go for it. It seems that some speculative activity is coming out of New York now,” said one dealer.
The rand shaved 10 cents versus the dollar late on Monday, hitting just over 7.68 at one point. But on Tuesday evening the currency started weakening evening further. By 0900 the currency was trading at 7.7300 to the dollar.
One technical analyst said earlier that a close over 7.68 would be quite bearish but if it could stay below there it could quickly claw back its lost ground to 7.58.
”Given that this renewed bout of weakness seems to have been driven by an unsourced rumour in the press, I expect a solid bounce back,” the analyst said.
The rand was bid at over 11.5154 to the pound – an historic low and the second low for the day. Against the euro, it fell around 9 cents to 7.28.
Bonds recovered some poise after failing to crack a technical level of 12.04/05 percent, with the yield on the key R150 bond dipping to 11.98 percent from 12.04 percent at one point in the day. The yield was still five basis points above late Monday levels.
One bond trader said it looked like the bond would trade in a range of 12.00-11.92% on Wednesday with no major economic data to give the market direction. – Reuters