Bonds firmer on positive sentiment and Gigaba meeting with Moody’s
South African bonds, which usually track the rand, keep pace with ‘potentially positive developments on the political front’
South African bonds were slightly firmer on Thursday afternoon with the rand stable after Finance Minister Malusi Gigaba said he would try to meet and convince ratings agency, Moody’s that the country would stay on the path of fiscal discipline. This comes after S&P Global Ratings and Fitch’s credit downgrades to sub-investment after a Cabinet reshuffle resulted in Pravin Gordhan being fired as the finance minister by President Jacob Zuma. The local currency reached an intra-day low of R13.5913 to the dollar but made gradual gains in afternoon trade. Bonds, which usually track the rand, have also kept pace with the sentiment of local politics. On Wednesday, the yield on the benchmark R186 was 8.86% from Tuesday’s 8.93% in intra-day trade after the anti-Zuma march in Pretoria exceeded expectations. Rand Merchant Bank analyst John Cairns said the rand and local bonds have strengthened on potentially positive developments on the political front and the continued positive emerging-marke...
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