"Until there is a concrete plan to resolve SA's energy
crisis that the market buys into, the underperformance will
persist, notwithstanding the attractive yields on offer and deep
undervaluation in the ZAR."
The government's local bonds also dropped, with yields on
the benchmark 2030 bond rising 23 basis points to 10.560%, the
highest level since December .
ETM Analytics said in a separate note on Wednesday morning
that misleading headlines on Tuesday had sparked the market rout
by giving "the impression that was losing control of the grid".
"SA is in trouble, the grid is under pressure, Eskom does
face multiple threats, but none of this is anything new," it
said.
On the stock market, the blue-chip index of top 40 companies ended down 0.17% while the broader all-share index was flat.
(Reporting by Tannur Anders, Rachel Savage and Nellie Peyton;
Editing by Alexander Winning, Subhranshu Sahu and Shailesh
Kuber)
(Updates prices to reflect afternoon trade)
By Rachel Savage and Tannur Anders
JOHANNESBURG, May 10 (Reuters) - The South African rand
plunged to a three-year low on Wednesday after a steep drop in
the previous day, while international and domestic government
bonds also fell, as fears grew of scheduled blackouts known as
loadshedding worsening during winter.
At 1530 GMT, the rand was trading at 18.8750
against the U.S. dollar, its weakest level since early May 2020.
On Tuesday, the rand had fallen about 1.7%.
South Africa's sovereign dollar bonds dropped, with longer
dated maturities falling the most. At 1505 GMT the 2052 maturity
was down 0.77 cents in the dollar to 82.8 cents, having fallen
more than 1 cent earlier in the day . At one
point the yield rose above 9%, its highest in almost six months.
South Africa's struggling state utility Eskom told
parliament on Tuesday that there would be a 45-day delay in
returning a generating unit online, according to local media.
The delay is likely to add further pressure on the grid
during winter, when loadshedding across most parts of the
country is already more than 10 hours a day.
"SA bonds and the ZAR (rand) are underperforming their EM
counterparts," Kieran Siney of ETM Analytics said in emailed
comments on Wednesday morning.
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