October 18, 2019 / 4:39 PM / a month ago

UPDATE 1-South Africa's rand rides optimism over new power plan

(Updates to reflect afternoon trade)

JOHANNESBURG, Oct 18 (Reuters) - South Africa’s rand firmed on Friday, building on gains made after the government released a long-delayed plan for electricity generation to address crippling power cuts.

At 1620 GMT, the rand was up 0.3% at 14.7900 per U.S. dollar.

The South African currency rallied from near 15.00 to a session-best 14.77 on Thursday, ending a losing streak triggered by state power utility Eskom’s resumption on Wednesday of nationwide controlled blackouts.

Eskom has blamed unforeseen breakdowns at some of its coal-burning plants, but analysts say they are a symptom of mismanagement over many years, which has seen it sink into roughly 440 billion rand ($30 billion) of debt.

The release of the new electricity generation plan, replacing a previous blueprint not updated for almost a decade, gave investors a degree of policy certainty, but Eskom still does not have a permanent chief executive.

South African government bonds traded slightly firmer, with the yield on the benchmark government paper due in 2026 down 2 basis points at 8.24%.

Stocks closed weaker, with the Johannesburg All-share index down 0.48% to 55,723 points, while the benchmark Top-40 index declined 0.41% to 49,511 points.

Bank stocks fell as the index edged 1.24% lower. FirstRand slipped 1.89% to 65.99 rand, Standard Bank shed 1.44% to 179.20 rand and Rand Bank Merchant lost 1.02% to 80.17 rand.

Gold stocks shone with the index up 1.76% amid global market uncertainty. Harmony rose 3.41% to 46.96 rand and AngloGold America 2.02% to 306.70 rand. (Reporting by Mfuneko Toyana and Onke Ngcuka; Editing by Alexander Smith)

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