Eskom’s financial and operational crisis loomed large as finance minister Tito Mboweni delivered a gloomy budget that showed a deterioration in SA’s finances and economic outlook, which may raise the ire of ratings agencies. Delivering his first budget speech since he returned to the cabinet in October, Mboweni predicted that budget deficits would be wider than expected four months ago owing to a weak economy, another shortfall in revenue collection and the need to set aside more cash for the ailing state-owned enterprises (SOEs). Local risk-assets sold off sharply within a few minutes of Mboweni beginning his speech, with the yield on the benchmark R186 government bond rising to a two-month high. The rand had been trading at R14.16/$ shortly before the minster began speaking. At 2.15pm it had fallen 2.27% to R14.3661/$, while the yield on the government’s 10-year bond, due in 2026, rose above 9% for the first time since December 2018. The R186 was bid at 9.05%, 2% weaker than its c...

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