South African bonds were weaker on Friday morning, tracking a weaker rand that extended its losses overnight. The rand gave up its recent recovery gains on Thursday afternoon as the local market picked on up the heightened political risk sentiment and uncertainty around the next week’s medium term budget policy statement. Concern about political risk remains following the surprise Cabinet reshuffle on Tuesday, while economists are sceptical that Finance Minister Malusi Gigaba’s maiden medium-term budget next week will be able to avoid a credit-rating downgrade. Sasfin fixed-income traders said the rand weakened overnight because Gigaba was scheduled to speak later on Friday and traders were waiting for content related to next week’s budget. However, the analysts said that foreign accounts did not appear to be too perturbed about local bonds as they ended as net small buyers on the day. At 9.17am the R186 government bond was bid at 8.8200% from Thursday’s 8.785%. The rand was at R13....
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