Smaller than expected outflows show there is life, and liquidity, after WGBI exit
It is almost eight months since SA lost its last investment-grade credit rating, causing it to be ejected from the FTSE World Government Bond Index (WGBI) and prompting a sell-off of its government bonds as the last of the WGBI tracker funds exited their positions.
It was an event that had been long anticipated and long feared. The market had been positioning for a downgrade since the second quarter of 2018. This finally happened in March, just as the Covid-19 pandemic sparked panic in markets around the world and SA entered its own tough lockdown, though its formal departure from the WGBI took place at the end of April...
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