South African bonds steadied at weaker levels on Monday afternoon, as the rand slipped towards R13.20 to the dollar, its worst level in about two weeks. The drop in the value of the local currency, which usually affects bonds, came after Moody’s Investors Service highlighted concerns about SA’s low growth path. The rating agency said in a statement that slow progress with structural reforms would continue to impede potential growth. The key areas of concern include the infrastructure gap, skills shortages, relatively weak educational outcomes and the risk of further industrial action. "The bottom line, in my view, is that [local] political risk is still not sufficiently priced into the market," Kaon Capital CEO Luke Alers said, adding that volatility would persist until December when the ANC elected its new leader. At 4.05pm the R186 was bid at 8.63% from Friday’s 8.58% and the R207 at 7.39% from 7.36%. The rand was at R13.1982 to the dollar from R13.0219.
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