April 20, 2018 / 3:47 PM / a month ago

UPDATE 1-Rand retreats on end-of-week profit taking, stocks inch higher

* Stocks slightly higher

* Steinhoff up after AGM

* Rand lower on higher dollar demand (Adds trader quote, stocks and update rand level)

JOHANNESBURG, April 20 (Reuters) - South Africa’s rand weakened by as much as one percent on Friday, hit by returning demand for the dollar and rising U.S. treasury yields that prompted profit taking after the local currency’s recent rally.

Stocks nudged higher with Steinhoff International and British American tobacco among the better performers.

At 1500 GMT the rand was 1.1 percent weaker at 12.0900 per dollar from a close of 11.9600 overnight.

Bonds also weakened, with the yield on the benchmark 2026 paper adding 3.5 basis points to 8.04 percent.

The unit, along with other emerging market (EM) currencies, was weighed down by end-of-week dollar demand, while some local traders opted to close positions to avoid losses in low liquidity conditions.

“The stronger dollar has been the main trigger. There’s not much happening in EM today, and on a Friday there’s a lot of position squaring and that’s weighing on the rand,” said currency dealer at TreasuryOne Andre Botha.

The dollar was up 0.42 percent at 1500 GMT against a basket of major currencies, while the two-year U.S. Treasury yield at 2.449 percent, its highest level since around September 2008.

In the equities market, the Johannesburg all share index rose 0.1 percent to 57,581 points, while the benchmark top 40 index inched 0.07 percent higher to 50,765 points.

Embattled retailer Steinhoff International, which held its much anticipated annual general meeting, pared gains after earlier rising to 3.23 rand. It closed 1.95 percent higher to 2.61 rand after it said it was in talks with creditors about restructuring its debt.

Steinhoff, which runs chains such as Poundland and Mattress Fir, is fighting for survival after discovering holes in its accounts. The scandal has wiped billions off its stock market value and triggered a cash crunch.

“They say that they will have their results finalised by December. It is a year later but at least we know when to expect audited results,” said an equities trader at Independent Securities Vasili Girasis.

Tobacco company British American Tobacco recovered slightly from Thursday’s slump when weak results from Philip Morris in the U.S. dented cigarette makers. It closed 1.17 percent higher to 626.25 rand.

Reporting by Patricia Aruo and Mfuneko Toyana Editing by Elaine Hardcastle

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