African markets

South African markets tumble on new variant of COVID-19

Aquote dds actions

JOHANNESBURG, November 26 (Reuters)The South African Rand dipped below 16.00 per dollar for the first time this year Friday because, with investors bewildered by the discovery of a significant variant of the coronavirus in the country, government bonds and stocks also fell.

The inventory declines were driven by a sharp drop in hospitality stocks as Britain and some other countries restricted travel to South Africa and its neighbors.

Britain also said that due to mutations, the virus variant was considered by scientists to be the most important ever found.

“Risky trade as a new variant of COVID-19 in South Africa, potentially the Grinch who steals Christmas,” ETM Analytics analysts said in a note.

“The momentum was already on the rise for the USD due to positioning for more aggressive monetary tightening (by the Federal Reserve) in the coming months, and the discovery of this new variant … will significantly reduce the resilience of the ZAR against it. broader dollar movement. “

AT 0725 GMT, the rand ZAR = traded to 16.2200 against the dollar, 1.52% wfaster than its previous close.

In fixed income, the return of the 2030 benchmark ZAR2030 = the maturity jumped 24.5 basis points to 9.97%.

South African scientists said on Thursday they had detected a new variant 19 that exhibited a “very unusual constellation” of mutations, which were of concern because they could help it evade the body’s immune response and make it more transmissible.

On the stock market, both the Top-40 .JTOPI index and the broader set of stocks .JALSH were down nearly 2% in early trade.

City Lodge Hotels led the way CLHJ.J, down 20%.

Sun International Shares SUIJ.J, owner of casinos and hotels including the Sun City Resort, fell nearly 14% and while the shares of Tsogo Sun Hotels TGOJ.J fell by more than 11%.

(Reporting by Olivia Kumwenda-Mtambo; Editing by Shailesh Kuber and John Stonestreet)

(([email protected]; +27 10 346 1084;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.