Stocks Sink on Rate Fears
April 27, 2011
The rand hovered close to its all-time low against the dollar Thursday, keeping alive fears that the Reserve Bank will be forced to lift its official Bank rate from 16% to support the ailing currency. By the close of trading on the Johannesburg Stock Exchange, the All Share index lost 52 points to 6564, the Industrial index dropped 79 points to 7774 and the All Gold index shed 16 points to 1762. Blue chip industrial stocks were again the targets for jittery investors pondering the damage higher interest rates would have on an already slowing economy. South African Federico was one of the better performers in the industrial sector, losing only 25 cents to 118.50 rand. Industrial investment conglomerate Rembrandt Group fell 1.45 rand to 38.30 rand. Traders attributed at least some of this decline to a judgment in the U.S. last week against a unit of Britain's B.A.T Industries PLC that hurt stock prices of tobacco companies around the world. Steel-maker Iscor has been one of the most prominent victims of interest rate anxiety and Thursday its stock price dropped another four cents to 2.76 rand, only two cents above its 2011 low.
