South African bonds were flat on Wednesday shortly before midday, recovering from earlier weakness that followed news that the country had entered a recession. Analysts said on Wednesday that recent interest by foreign investors in South African bonds increased the prospect of a Reserve Bank interest-rate cut later in 2017. Statistics SA reported on Tuesday that the economy had contacted 0.7% in the first quarter, well below consensus for growth of 1%. On Wednesday, the South African Chamber of Commerce and Industry reported that business confidence had slipped to its lowest level this year in May. RMB Global Markets analyst John Cairns said on Wednesday it was expected that the South African economy would also contract in the second quarter of 2017. "The [Reserve Bank] and ratings agencies will also have to revise their growth outlooks lower. This increases the possibility of rate cuts towards year-end, although we still think the [bank] will remain in a wait-and-see mode for the n...
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