The South African bond market steadied on Friday morning, but the underlying trend pointed to a gradual improvement in sentiment towards local assets. The yield on the benchmark R186 bond rose to highs of 9.20% as political temperatures rose in the days after President Zuma fired Pravin Gordhan as finance minister in a controversial Cabinet shake-up. The Cabinet changes also prompted S&P Global Ratings and Fitch to downgrade the country’s debt, which analysts have warned will put a strain on the country’s finances. But since then, the yield on the R186 bond has been flattening, backed up by yield-seeking foreigners. Net bond inflows amount to more than R20bn since the start of April, according to the JSE data. "The world’s investors have ... seemingly forgotten that our country is heading for one crises after another in their unquenchable hunger for yield," Standard Bank analyst Andrew Goslett said in a note. Net bond flows have also boosted the fortunes of the rand, which in turn h...
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