In the weeks leading up to the medium-term budget policy statement (MTBPS), markets were on edge. The confusing political climate gave rise to weakness in bonds, bank shares and the rand.After it became apparent there would be few changes at national treasury and that SA would maintain prudent fiscal policy, SA experienced a general appreciation in local assets, with international events making a positive contribution.The strong demand for emerging-market assets and a better inflation outlook has resulted in bond yields with the 10-year note remaining below 9%. Bonds are a good litmus test for investor sentiment on policy formulation at treasury.During his mini-budget speech, finance minister Pravin Gordhan seemed to have taken comfort in comments from the Global Markets publication, which suggest SA’s sovereign debt management is among the best in the world.The World Bank has also weighed in on SA’s debt management framework, saying the country has the capacity to absorb fiscal sho...
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