The South African bond market was weaker on Tuesday morning, taking its cue from the rand, which had shed a further 2.09% from its previous close. The rand traded sharply lower against the dollar on Monday following news that Finance Minister Pravin Gordhan had been recalled by President Jacob Zuma from an investor roadshow in the UK. This has renewed speculation of a Cabinet reshuffle. The benchmark R186 bonds which usually tracks the rand, was 1.94% weaker from Monday’s close due to the political risk. At 09.01am the R186 was bid at 8.89% from Monday’s 8.72% and the R207 at 7.90% from 7.74%. Rand Merchant Bank (RMB) analyst John Cairns said it investor roadshows were extremely important and unexpectedly cancelling one, with no explanation, made investors nervous. "Add an embattled finance minister, plus a potential Cabinet reshuffle, and you get the sell-off we saw today." The bond market attracted a net R5.2bn worth of foreign flows over the past week. Total bond inflows stand at...
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