Picture: INVESTORS MONTHLY
Picture: INVESTORS MONTHLY

SOUTH African bonds were weaker on Tuesday afternoon as the rand lost ground on news of renewed tension between the Hawks and Finance Minister Pravin Gordhan.

In a hard-hitting statement against Mr Gordhan, the Hawks have warned that the directorate found his actions "disturbing". It would "exercise its constitutional powers" and would not give him preferential treatment, it said.

At 3.31pm, the benchmark R186 bond was bid at 9.340% and offered at 9.320% from a previous close of 9.130%.

The middle-dated R207 was bid at 8.810% and offered at 8.790% from Monday’s close of 8.620%.

A Rand Merchant Bank trader said the rand was about 30c weaker at about the time the Hawks released their statement, but the local currency was already in a weakening trend beforehand.

The rand was trading at R15.9665 to the dollar from R15.5375 previously.

Analysts at NKC Economics said bond prices were little moved in earlier trade as the rally during the first half of March seemed to have taken a breather. Investors used their time to re-evaluate positions ahead of US Federal Reserve and Reserve Bank interest rate announcements later this week.

The Fed started its two-day policy meeting on Tuesday. While no change to monetary policy was expected, the bank’s policy statement and economic projections, as well as chairwoman Janet Yellen’s news conference on Wednesday, would be closely watched, Dow Jones Newswires reported.

The Fed’s interest rate decision is due on Wednesday, while the South African Reserve Bank’s and Bank of England’s announcements are scheduled for Thursday.