South African bonds were weaker on Thursday afternoon as analysts said market sentiment remained negative following President Jacob Zuma’s Cabinet reshuffle on Tuesday. The market is now eyeing Finance Minister Malusi Gigaba’s medium-term budget policy statement next week with the government expected to undershoot revenue targets, resulting in a larger budget deficit, which would be bond negative. Rand Merchant Bank (RMB) analyst Gordon Kerr said the bond market remained concerned about the intended R1-trillion nuclear deal. "However, there are still buyers around and the global environment was still supportive of local rates, albeit at higher levels than before," Kerr said. Bonds traded on the back foot following September’s marginally higher consumer price index (CPI) released earlier. Kerr said some selling was evident in response, "implying that the general feeling is that inflation is not here to stay [at present levels]". At 3.16pm, the R186 was bid at 8.790% from 8.745% and t...
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