Bonds weaker as market shows little reaction to unchanged rate decision
South African bonds were weaker on Friday at midday as the market showed little movement following the Reserve Bank’s decision on Thursday to keep rates unchanged. Analysts said the market was awaiting the outcome of February’s budget and a possible downgrade thereafter by ratings agency Moody’s. Local bonds have so far showed little concern about this possibility, as the higher local yields remain attractive to global investors. TreasuryOne analyst Phillip Pearce said the Bank’s decision to leave rates unchanged certainly enticed investors to our market, "who have expressed a tremendous appetite for emerging-market debt yield". This makes you think that maybe actively managed fixed-income funds would clean up the void when the passive funds are forced to disinvest if Moody’s announces a downgrade, he said. At 11.36am, the R186 was bid at 8.500% from 8.485% and the R207 at 7.145% from 7.140%. The rand was at R12.1707 to the dollar from R12.1312. The continued slide in US government ...
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