South Africa’s commodity-backed rand and stock markets fell more than 1% on Tuesday, following a decline in gold prices, which dropped below the $4,000-per-ounce mark.
The rand was trading at 17.5025 to the dollar, 1.1% weaker than the previous day’s closing rate.
Spot gold prices were down 0.7% around the same time, while the US dollar rose 0.2% against a basket of other currencies.
As a significant producer of precious metals, South Africa usually benefits from higher gold prices.
On the Johannesburg Stock Exchange, the Top 40 index decreased by 2%, primarily affected by losses in precious metal mining companies. Northam Platinum and Valterra Platinum were the biggest losers, with their shares down about 7%.
Gold Fields, Sibanye Stillwater, and Harmony Gold all saw a 5% decline.
Analysts noted in a research report that South Africa’s risk-sensitive assets are likely to remain on the defensive, closely tracking US equity markets and the overall risk appetite they reflect for clearer directional trends.
On Monday, 5 November, the rand was trading at R17.49 to the dollar, R22.79 to the pound and R20.10 to the euro. Oil was trading slightly lower at $64.47 a barrel.
5 important things happening in South Africa today
Eskom in its ‘last’ decade: Eskom is in its last decade as the major producer of electricity in South Africa. The National Transmission Company projects a decline in Eskom’s supply as it and independent producers plan 283 GW of new renewable capacity, with only 20 GW from Eskom, making up just 7% of the total. This means private South African companies will produce four times more power than Eskom’s entire fleet. [MyBroadband]
More good news for South Africans with DStv: Canalt, MultiChoice’s new owner, aims to invest nearly R2 billion in annual cost savings into growth. The good news for DStv customers is that this will be used to lower decoder prices, increase content, and improve distribution. The media giant views Africa as a significant growth opportunity and recognises the need to scale up to compete with rivals like YouTube. [News24]
End of an era for Patrice Motsepe’s mining giant: Mining major African Rainbow Minerals (ARM) says it will no longer invest in any new coal mines as tougher environmental mandates make them less economically viable. [Business Day]
Government ordered to address xenophobia: The Johannesburg High Court has ruled that the national government must implement its national action plan to combat xenophobia. This decision favours civil groups that challenged the controversial group Operation Dudula, which the court deemed unlawful for demanding identity documents in public hospitals and schools. [EWN]
Online gambling confusion: The recent Gauteng High Court judgment on roulette betting, backed by the Supreme Court of Appeal, should not be seen as a national ban on online gambling in South Africa. Attorney Wayne Lurie, with nearly 24 years in gambling regulatory law, highlighted that the National Gambling Board misinterpreted the ruling as applicable nationwide. He clarifies that the judgment is fact-based and interprets only one clause in the Gauteng Gambling Act. [Newsday]