South Africa’s rand reaches record low

Research by Citrix, mobile workspace solutions firm, and London-based Centre for Economics and Business Research (Cebr) found that South Africa could add 17 billion rand per year to its economy, or 0.4 per cent of gross domestic product (GDP).

On an annual basis, economic growth eased to 1.2 percent in the June quarter from 2.1 percent in the preceding quarter.

Growth in export volumes more than halved to 2.3 percent in 2014 and compares with expansion of 9.4 percent in 2010, according to data from the central bank.

Headline EPS is the main profit gauge in South Africa and strips out certain one-off items.

“An very bad… print that will consolidate a lot of the bearishness around the economy right now, and likely exert a weakening influence on the rand at a time of intense market volatility”, Standard Chartered economist Razia Khan said. “This is an extremely bleak external backdrop for commodity currencies”.

THE rand plunged to a record low against the US dollar on Monday, recording its biggest daily loss in 19 months as rising concern about waning growth in China hit commodity currencies.

“Things being equal one would have expected manufacturing would boom when the rand touches 14 a dollar”, he said. Several state-owned companies, including power utility Eskom, are in disarray amid management upheavals.

Finance Minister Nhlanhla Nene will struggle to balance flagging growth while keeping a cap on spending when revenues are increasingly hard to come by, analysts said. Boosted by a rate cut in China, investors piled into everything from banks, telecoms to retailers after four days of back-to-back declines that pushed the benchmark JSE Top-40 index to its lowest level in almost 12 months. “The combination of those two factors mean that we have not benefited fully from the weak rand”.