As the dust settles after the medium-term budget policy statement the response by local risk assets has been mixed, with equities rebounding on Thursday from an initial sell-off, while the rand and local bonds have continued to weaken. The outlook for the local currency and bonds has become increasingly clouded analysts said, with the market blindsided by a budget that has been seen in most quarters as credit-negative. The all share closed 1.47% higher on Thursday, more than recovering from Wednesday's 0.57% fall. Shortly after the JSE closed the rand was about 40c weaker against the dollar from when finance minister Tito Mboweni began his speech.

The policy statement has rekindled some concerns that SA could lose its last remaining investment-grade status, with the all share's recovery on Thursday coming despite a sharp fall by tech-heavy Nasdaq on Wednesday. The jitters came as Mboweni upwardly revised the projected government budget deficit, pushing up the associated govern...

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