Rand slides on land vote
The local currency lost Tuesday morning’s gains on better-than-expected GDP after parliament voted in favour of amending the constitution
The rand weakened 2.6% to R13.89/$ on Tuesday evening after parliament voted in favour of amending the constitution to allow land expropriation without compensation.
The parliamentary vote reversed Tuesday morning’s gains following better-than-expected GDP growth.
The rand was trading at R13.85/$, R15.69/€ and R17.59/£ at 6.20am.
“This is just the first stage and does not imply any change to the constitution at this stage,” Intellidex analyst Peter Attard Montalto said in a note e-mailed on Tuesday night.
“The next stage is on Thursday. At that time a second motion before the National Assembly will be debated, which will lay out how the whole process will move forward in terms of next steps of drafting, public consultations etc.”
Asian markets took their cue from Wall Street, where the Nasdaq index fell 3.8% and the S&P 500 3.2% on Tuesday following comments by US President Donald Trump and his officials that dampened the prospect of a trade deal with China.
The Wall Street Journal reported that Trump’s chief economic adviser, Larry Kudlow, “who usually makes optimistic pronouncements about the prospects for a deal with China, was stark as the talks get under way”.
“I would like us to get a deal,” Kudlow said. “But it’s got to be a good deal and it’s got to be verifiable.”
South Africans invested in US stocks via products such as CoreShares S&P 500 index tracking exchange-traded fund have had roller- coaster ride this year.
From a trough of R30.55 at the end of March, the S&P 500 in rand rose to a peak of R44.95 in early September before sliding again.
Tencent was down 2.4% to HK$320.60, indicating a bad day for Naspers, its largest shareholder and the top-40 index’s largest constituent.