GADFLY: SA’s bonds have no patience for time or space
Not telling Jacob Zuma to go, and go soon, could seriously damage local bonds, the rand, and SA’s already tenuous credit ratings, writes Marcus Ashworth
London — Time and space are wonderful things — except SA doesn’t really have the luxury of either. The ANC is trying to smooth the end of President Jacob Zuma’s political career, and on Tuesday decided not to set a deadline for him to respond to their decision that he should leave office. An extended exit has the capacity to seriously damage the South African domestic bond market, and reverse recent gains in the rand as well. A raft of political turmoil and a global bond-market rout haven’t been enough to unseat South African debt this year. The yield on the nation’s benchmark 10.5% 2026 bond has dropped sharply since December, when Cyril Ramaphosa won the ANC leadership contest. Those gains look fragile at best. Two deadlines loom for investors. The first is the budget statement, which Finance Minister Malusi Gigaba is to deliver on February 21. And Moody’s Investors Service, the only one of the three main credit-rating agencies to assign the local-currency debt an investment grade...
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