Bonds reel as S&P downgrades SA’s foreign-currency debt
The yield on the benchmark R186 bond worsened through the 9% mark for first time since December
The South African bond market stabilised at a weaker level at lunchtime on Tuesday, but remained sensitive to news around the Cabinet reshuffle. The yield on the benchmark R186 bond steepened through the 9% mark for first time since December, after S&P Global Ratings stripped the country of its investment status on a foreign-currency basis. "It all looks a bit of a mess in these uncertain times. In the bigger scheme of things it is probably better that all the downgrades and political conflicts come to a head sooner rather than later, so that markets can price in the risks and get on with it," said Ashley Dickinson, head of fixed-income dealing at Sasfin Securities. The downgrade to subinvestment grade, or junk status, comes less than a week after President Jacob Zuma reshuffled his Cabinet, firing Pravin Gordhan as the finance minister and replacing him with Malusi Gigaba, former minister of home affairs. The reshuffle has triggered a backlash from various quarters, with labour fed...
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