SA bonds still a good buy despite worsening interest rate outlook, says Ninety One
Asset manager says rate hikes by the Reserve Bank will preserve the yield advantage of SA bonds in the face of rising US Treasury yields
Ninety One, the asset manager spun out of Investec in 2020 that oversees about R2.86-trillion, says SA bonds are still a good investment despite a deteriorating interest rate and inflation outlook.
Peter Kent, a fixed-income portfolio manager at Ninety One, says inflation has probably peaked despite hitting an almost four-year high of 5.9% year-on-year in December, the highest rate since March 2017 when it reached 6.1%. While that will put pressure on the Reserve Bank to hike rates, especially since the US Federal Reserve is expected to hike rates four times this year, Kent says higher borrowing costs aren’t necessarily a bad omen for SA bonds, which still offer very attractive relative yields...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.