The following company announcements, scheduled economic indicators, debt and currency market moves and political events may affect South African markets on Wednesday.
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- Power utility Eskom sells 300 million rand of its EL28 inflation linked bond due in 2028. 0900 GMT
- Reserve Bank Deputy Governor Daniel Mminele speaks at Southern African German Chamber of Commerce and Industry AGM. 1100 GMT
- ArcelorMittal South Africa releases its interim results.
- AECI Ltd releases its interim results.
South African stocks gained over half a percent on Tuesday, clawing back some of the previous session’s steep losses, as investors cautiously waded back into the market ahead of a rush of corporate earnings.
Bullion heavyweights AngloGold Ashanti and Gold Fields both maintained a technical rally mobile operator MTN and others were lifted by investors searching for higher dividends.
South Africa’s rand fell to its weakest against the dollar in more than seven weeks on Tuesday and could attempt early June’s three-year lows in nervous trade as a grim outlook for the euro zone keeps investors largely averse to risky assets.
Yields rose as government bonds pulled back from recent highs which had left them looking overbought, although local debt still holds long-term appeal for investors looking for better returns than the near-zero rates on offer in developed countries.
Asian shares fell and the euro wobbled above multi-year lows against major currencies on Wednesday as soaring borrowing costs deepened worries that Spain might need a bailout, while Greece appeared unlikely to meet terms conditional to its aid package.
Wall Street stocks fell on Tuesday, hit by signs the euro zone crisis is worsening and evidence that Europe’s slowdown is hurting U.S. companies, including bellwether UPS.
The decline was the third straight for the S&P 500 index, which tested its 50-day moving average, a technical support level which could trigger more selling if convincingly broken.
Gold inched higher on Wednesday, extending gains into a second straight session as poor economic data from both sides of the Atlantic helped raise hopes for further monetary stimulus measures, which would increase gold’s appeal as an inflation hedge.
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Some of the main stories out in the South African press:
- World Bank warns on inequality threat to S.Africa
- Eskom says new labour bills could threaten progress on power plants
- Nedbank to remain with Old Mutual (Compiled by Olivia Kumwenda)