The yield on the South African benchmark bond was weaker on Monday morning, following a sovereign-credit rating downgrade by ratings agency S&P on Friday. Moody’s, however, kept its ratings on review for a downgrade. The rand, which bonds usually track, weakened below the R14/$ level after the rating announcements, which came just before midnight, following range-bound trading around R13.90 on Friday. Analysts say that while there will be some capital outflows from the bond market, they may not be as large as expected. "The slip in the credit rating increases the calls for reforms even louder and may lead to more aggressive falls in the rand, government bonds, and business and consumer confidence, which is needed to attract investment, create jobs and grow the economy," Novare Actuaries and Consultants economic strategist Tumisho Grater said. Grater said that although SA fell out of the JP Morgan Emerging Markets Index after the downgrades in April, the hunt for yield lifted global ...
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