South African bonds were a lot stronger Thursday morning, after Jacob Zuma stepped down as head of state, removing a cloud that hung over local market. The yield on the benchmark R186 bond was at 8.34% in early trade from 8.40%, mirroring a stronger rand that was at a three-year high to the dollar. The stronger rand acts as a buffer against inflation and could persuade the Reserve Bank to cut interest rates, considered a boon for the bond market. "We should test lower [stronger] this morning on the big news but again much of the good news is already in the price and a difficult budget as well as a possible downgrade still lie ahead," said Deon Kohlmeyer, analyst at Rand Merchant Bank. Moody’s is set to deliver its ratings review on SA shortly after the budget, which Finance Minister Malusi Gigaba is meant to deliver next week. Moody’s is the only major ratings agency that still has the country’s credit rating at investment grade. It remains unclear at this stage if Moody’s will gran...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.