South African bonds had firmed shortly before noon on Monday, reacting favourably to rand gains at the weekend, which followed news of Jacob Zuma’s future recall. After weeks of speculation, the ANC national executive committee has now resolved that Zuma should go, although the timeline for this is still unclear. Another significant development was the sudden appointment of a new Eskom board. The power utility has been hobbled by allegations of corruption and mismanagement. Both political uncertainty and problems at Eskom, notably its demands for massive electricity tariff increases, have been directly cited as key risks facing SA’s economy by global credit-ratings agencies. Large reforms at state-owned enterprises had helped to revitalise the recent rally in both the rand and bonds, Rand Merchant Bank analyst Gordon Kerr said. In addition, local political power seemed to be slowly leaning towards the reformist camp, which gave investors hope that a potential downgrade by Moody’s in...
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