October 29, 2019 / 6:52 PM / a month ago

UPDATE 1-South Africa's rand dips before budget speech

(Adds detail on stocks)

JOHANNESBURG, Oct 29 (Reuters) - South Africa’s rand dipped on Tuesday, a day before the finance minister is expected to reveal wider government deficits and higher debt in a budget speech.

At 1830 GMT, the rand was 0.3% weaker at 14.6090 per U.S. dollar.

Finance Minister Tito Mboweni will deliver a keenly waited medium-term budget speech on Wednesday, which is expected to show a wider budget deficit than the February estimate of 4.5%, as well as higher debt and lower growth projections.

Africa’s most industrialised economy is battling to kick-start economic growth, with the treasury target of a 1.5% expansion in 2019 unlikely after nationwide power cuts by state utility Eskom dragged the economy into contraction in the first quarter.

Government bonds were unchanged on Tuesday, with the yield on the benchmark 2026 bond at 8.20%.

On the local bourse, the Top-40 Index closed down 0.1% at 49,477.44 points, while the broader All-Share Index closed 0.1% lower at 55,716.69 points.

“The market is really, I think, marking time until after the medium-term budget tomorrow,” said Greg Katzenellenbogan from Sanlam Private Wealth.

Katzenellenbogan also warned that a potential water crisis, which has already seen dam levels drop and the government implementing water restrictions, could be a source of concern for investors.

Among the biggest fallers on the blue-chip index was bourse heavyweight and tech giant Naspers Ltd which slipped 0.28% to 2,090 rand.

Further losses came from the gold sub-index, with AngloGold Ashanti 3.68% lower and Gold Fields falling 2.2%, weighed down by a weaker spot gold price.

Reporting by Mfuneko Toyana and Naledi Mashishi; Editing by Lisa Shumaker

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