Bonds trade slightly firmer as market holds its breath before policy statement
South African bonds were marginally stronger at midday on Wednesday, taking their cue from a rand that was trading in stronger territory. Markets were waiting for Finance Minister Pravin Gordhan’s medium-term budget policy statement later on Wednesday, and the effect it might have on ratings agencies’ views of SA. NKC Research analysts said Gordhan was expected to present an austere statement. Economists expected the budget deficit to widen slightly due to poor economic growth and revenue constraints. At 11.43am the yield on the R186 bond was at 8.755%, from 8.770% Tuesday. The yield on the R207 was at 8.000% from 8.040% on Tuesday. The rand was little changed at R13.7639 to the dollar from R13.7651 previously. Separately, the Treasury sold R2.35bn worth of its bonds on Tuesday and bond yields were mostly down from levels at previous auctions, showing a healthy appetite for bonds, the analysts said.
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