* Rand gains over 1 percent
* Investors buy oversold mining firms
By Helen Nyambura-Mwaura
JOHANNESBURG, Oct 9 (Reuters) – South African stocks
extended losses on Tuesday as a slightly firmer local currency
helped reverse the gains made by so-called rand hedges
like British American Tobacco.
South African Breweries — to which many investors
also fled in the previous session as the rand weakened —
unwound over 3 percent to 374.33 rand.
The rand firmed over 1 percent on Tuesday – although it is
still languishing near a 3-1/2 year low – weighed down by weeks
of illegal strikes that have hit the mining sector, a key source
of foreign exchange for Africa’s biggest economy.
“The stronger rand is causing the rand hedges to come off a
little bit, that’s why the market is negative,” said Malcolm
Moller, an equities trader at Vunani Securities.
“Rand hedges” refers to Johannesburg-listed shares of
companies that reap the bulk of their revenue outside of South
Africa, making them less sensitive to weakness in the currency.
The Top 40 index shaved off 0.76 percent to
31,940.31 and the All-Share index lost 0.73 percent to
36,070.74.
Continued…
