The South African government’s benchmark 10-year R186 bonds shrugged off a weakening rand on Friday morning, with the bid price strengthening by one basis point to 8.55% at 9.06am. The ask price was 8.53%, three basis points lower than the 8.56% yield the R186 bonds last traded at on Thursday. The drop in the interest rate demanded by buyers of R186 bonds was surprising since the rand fell sharply from under R12.30 per dollar to about R12.35/$ on Friday morning after The Citizen refuted reports that Derek Hanekom was preparing a second internal ANC motion of no confidence against President Jacob Zuma. A report in The Star newspaper on Thursday citing five anonymous ANC national executive committee (NEC) members saying Hanekom would propose the motion at next Wednesday’s meeting, sent the rand rocketing from about R12.40/$ to as low as R12.23/$, its best level since June 2015. Thursday’s strengthening rand saw the R186 bond’s yield narrow to 8.535% from 8.62% on Wednesday.
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