Bonds track slightly softer rand, as focus remains on budget speech
South African government bonds were marginally weaker on Tuesday morning, but bond prices remained at two-year highs, as investors closely watched the new administration of President Cyril Ramaphosa. Speculation that Ramaphosa will reshuffle the Cabinet before the tabling of the budget on Wednesday has waned; Ramaphosa will host former president Jacob Zuma and the 35-member Cabinet at a dinner on Tuesday evening. Reports have also suggested Ramaphosa will consult widely with the ANC’s strategic partners before any reshuffle, as he seeks to stamp his authority on the ANC and the state. The budget on Wednesday will be the primary local market-moving event this week, as investors and ratings agencies gauge to what extent the government will rein in spending. SA’s fiscal deficit is being closely watched by agencies, including Moody’s, as they consider the quality of SA’s debt. On Monday, ratings agency Fitch revised SA’s growth outlook for 2018 upwards and, while warning that it remaine...
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