South African bonds were mixed shortly before noon on Wednesday, at slightly weaker levels than earlier, despite the rand gaining after consumer inflation for November came in less than expected. Inflation decelerated to an annual rate of 4.6% in November, from 4.8% in October, Statistics SA data showed. A Trading Economics forecast had expected 4.7%. Lower inflation tends to benefit bonds, as there is less erosion of the purchasing power of future cash flows. The rand firmed after the inflation print, but bonds were little moved. Foreign interest in local bonds have decreased in recent weeks, but yields have traded in narrow ranges. Demand at Tuesday’s government bond auction, however, was higher than the pervious week, amounting to R9.5bn in bids compared with last week’s R8.2bn. Foreign investors were net sellers by a small amount on Tuesday, with the auction clearing largely due to domestic investors, said Sasfin Securities bond analysts. Rand Merchant Bank analyst Deon Kohlmeye...
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