The South African bond market was slightly firmer in late trade on Monday as the market followed the stronger rand.
The rand firmed more than 20c against the dollar in intraday trade after the government, labour and business reached broad consensus to create a more stable labour relations environment.
This could be helpful in staving off a ratings downgrade by the ratings agencies later in November.
At 3.31pm the R186 was bid at 8.955% from a previous 8.935% and the R207 was bid at 8.155% from 8.160%.
"The agreement between government, labour and business is good news with regards to the upcoming Moody’s rating announcement on Friday and S&P on December 2," said Stanlib director of retail investing Paul Hansen.
He said it was Stanlib’s view that the ratings agencies would give SA another six months to show economic growth. A downgrade was unlikely at this stage. "They would also like to see what happens in the February budget," he said.
Foreign investors sold a net R3.13bn worth of local bonds last week, according to the JSE data. However, the benchmark R186 firmed to below the important 9% level towards the end of the week as local institutional buyers returned to the market.
The local market was also taking its cue from firmer US treasuries, with the 10-year treasury gaining 1.41% to 2.3217% from 2.3567% earlier in late afternoon trade on Monday.
BCA Research said it was unlikely that the US bond market had now entered a bear market, despite the spike in the 10-year yield from 1.8% to 2.35% after Donald Trump’s election. "Fair value for the 10-year yield is at 2.25%," BCA said.
The rand firmed more than 20c against the dollar in intraday trade after the government, labour and business reached broad consensus to create a more stable labour relations environment.
This could be helpful in staving off a ratings downgrade by the ratings agencies later in November.
At 3.31pm the R186 was bid at 8.955% from a previous 8.935% and the R207 was bid at 8.155% from 8.160%.
"The agreement between government, labour and business is good news with regards to the upcoming Moody’s rating announcement on Friday and S&P on December 2," said Stanlib director of retail investing Paul Hansen.
He said it was Stanlib’s view that the ratings agencies would give SA another six months to show economic growth. A downgrade was unlikely at this stage. "They would also like to see what happens in the February budget," he said.
Foreign investors sold a net R3.13bn worth of local bonds last week, according to the JSE data. However, the benchmark R186 firmed to below the important 9% level towards the end of the week as local institutional buyers returned to the market.
The local market was also taking its cue from firmer US treasuries, with the 10-year treasury gaining 1.41% to 2.3217% from 2.3567% earlier in late afternoon trade on Monday.
BCA Research said it was unlikely that the US bond market had now entered a bear market, despite the spike in the 10-year yield from 1.8% to 2.35% after Donald Trump’s election. "Fair value for the 10-year yield is at 2.25%," BCA said.
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