Bonds firmer as rand strengthens on market optimism ahead of budget
The South African bond market was firmer at midday ahead of the budget speech on market optimism that Finance Minister Pravin Gordhan will deliver a fiscal consolidation budget. Gordhan is set to start his budget address at 2pm. Bond yields have been treading weaker for most of the week amid nervousness amid renewed speculation that Gordhan will be replaced. The concerns increased after the announcement that former Eskom CEO Brian Molefe is about to become an MP. TreasuryOne dealer Philip Pearce said Gordhan would have a tough time delivering a budget that had to steer between patronage and prudence. "We can expect continued pragmatism with fiscal spending and possible increases in income tax," he said. The market was likely to pay particular attention to any negative reaction from rating agencies after the budget speech, he said. At 11.35am the R186 was bid at 8.745% from 8.79%. The R207 was bid at 7.85% from 7.89%. The rand was at R13.0979 against the dollar from R13.1366 after st...
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