CHRIS GILMOUR: SA’s bond are appealing but unloved by investors
Perhaps investors are biding their time, betting that SA bond yields will move even higher when a downgrade finally materialises
It’s close to impossible not to become depressed at the current wave of negativity pervading SA politics, economics and listed equities. However, there might be a bright spot in the domestic bond market and at a recent PSG Asset Management seminar, investment analyst John Gilchrist gives an argument for the local fixed-income asset class.
Gilchrist comments that while the situation in SA is poor and deteriorating, it is nevertheless a lot better than most of its emerging-market peers. And our domestic bonds are currently offering the best real yields on a risk adjusted basis, being the highest yielding bonds in the World Government Bond Index. However, the unfortunate thing is that investors are not piling into them.