May 28, 2018 / 7:11 AM / a year ago

South Africa's rand rises after S&P leaves ratings unchanged

JOHANNESBURG, May 28 (Reuters) - South Africa’s rand gained on Monday after Friday’s late-night decision by S&P Global Ratings to keep the country’s debt unchanged at sub-investment grade “BB’/‘BB+” with a stable outlook.

* At 0630 GMT, the rand was up 0.42 percent at 12.4500 per dollar. It had traded above 12.50 before the S&P’s decision.

* S&P’s said the stable outlook reflected its belief that economic growth would pick up in 2018, although public debt would remain worryingly above 50 percent of GDP.

* In March, Moody’s kept Pretoria’s investment-grade credit rating and revised its credit outlook to stable from negative. Of the big-three ratings agencies, only Fitch has yet to give its rating update.

* Traders warned that relief for rand may be short-lived, because dollar strength and geopolitical uncertainty meant markets remained wary of riskier assets.

* Bonds rose, with the yield on benchmark debt due in 2026 down 2 basis points at 8.43 percent.

* Stocks were set to open higher at 0700 GMT, with the Johannesburg Stock Exchanges’ Top-40 future’s index up 0.42 percent.

* In early results releases, sugar producer Tongaat Hulett posted full-year profit fell 37 percent. The country’s biggest landline provider, Telkom, said full-year earnings declined 18.4 percent. (Reporting by Mfuneko Toyana, editing by Larry King)

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