Markets: Rand retains momentum on the back of the US election

Markets: Rand retains momentum on the back of the US election

JOHANNESBURG – The South African rand retained positive momentum on the back of external factors –a Biden presidency – as US elections continued to dominate global headlines.

In local news, administrators for state carrier SAA indicated that debt to aircraft lessors and “some creditors” are not covered by the R10.5bn ($665m) bailout (which only covered “initial commitments”) laid out in the ‘mini-budget’ presented in October, spurring concerns that the embattled parastatal will knock on government’s door for yet another hand-out in the short term.

Reuters quoted administrators as warning that around R1.7bn is owed to lessors and R600m to creditors “from before [SAA] went into administration” (almost one year ago).

Reuters further cited Kgathatso Tlhakudi, director-general of the ministry responsible for SAA, as stating that government “would pay the amounts to lessors and longstanding creditors but that it was still working on a solution.”

This came as Public Enterprises Minister Pravin Gordhan announced this week that “the ultimate aim is to remove the burden … from our shoulders” as government is contemplating partnership deals with potential investors; this process will however be hindered by a burden of unpaid debt. SAA failed to return profit since 2011.

The local unit traded firmer overnight. Expected range today R15.30/$ – R15.60/$.

South African bourse

The JSE All Share (0.88 percent) ended higher on Friday led by gains in large technology (+3.54 percent) stocks. In the overall emerging market sphere, the MSCI Emerging Market Index (+1.26 percent) traded stronger.

IOL/Reuters

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