SOUTH African bonds were weaker in late trade on Wednesday, taking their cue from a substantially weaker rand due to investor concern about the continuing tension between the Hawks police unit and Finance Minister Pravin Gordhan.
Mr Gordhan missed a second deadline on Tuesday to respond to questions by the Hawks about a ‘rogue unit’ at the South African Revenue Service.
The Hawks are now seeking legal advice on how to proceed with teh investigation of the unit.
At 3.29pm, the benchmark R186 bond was bid at 9.495% and offered at 9.485% from a previous close of 9.395%.
The middle-dated R207 was bid at 8.910% and offered at 8.895% from Tuesday’s close of 8.875%.
The rand was trading at R16.1735 to the dollar from R15.9259 previously. It touched a weakest intraday level of R16.2444 earlier in the day.
In a daily economic report, NKC Research said a stare-down between the Hawks and Mr Gordhan was intensifying. NKC said it was difficult to see how Mr Gordhan’s assurances to investors would outweigh developments this week suggesting that risk factors in investing in SA had increased significantly, and that a ratings downgrade loomed large.
The crux was that no matter what assurances Mr Gordhan gave and what level of trust existed in him, nobody could be sure he would be in office by this time next month, NKC economists said.
Nedbank CIB analysts said international markets were largely sedate as markets awaited the US Federal Reserve’s rate announcement later on Wednesday.
Meanwhile, the yield on the two-year US Treasury note, which was highly sensitive to interest rate changes, edged a touch lower to 0.962% after rising for five days, Dow Jones Newswires reported.
Yields rise as prices fall. Higher interest rates also tend to boost the value of the dollar.
Picture: BUSINESS DAY
SOUTH African bonds were weaker in late trade on Wednesday, taking their cue from a substantially weaker rand due to investor concern about the continuing tension between the Hawks police unit and Finance Minister Pravin Gordhan.
Mr Gordhan missed a second deadline on Tuesday to respond to questions by the Hawks about a ‘rogue unit’ at the South African Revenue Service.
The Hawks are now seeking legal advice on how to proceed with teh investigation of the unit.
At 3.29pm, the benchmark R186 bond was bid at 9.495% and offered at 9.485% from a previous close of 9.395%.
The middle-dated R207 was bid at 8.910% and offered at 8.895% from Tuesday’s close of 8.875%.
The rand was trading at R16.1735 to the dollar from R15.9259 previously. It touched a weakest intraday level of R16.2444 earlier in the day.
In a daily economic report, NKC Research said a stare-down between the Hawks and Mr Gordhan was intensifying. NKC said it was difficult to see how Mr Gordhan’s assurances to investors would outweigh developments this week suggesting that risk factors in investing in SA had increased significantly, and that a ratings downgrade loomed large.
The crux was that no matter what assurances Mr Gordhan gave and what level of trust existed in him, nobody could be sure he would be in office by this time next month, NKC economists said.
Nedbank CIB analysts said international markets were largely sedate as markets awaited the US Federal Reserve’s rate announcement later on Wednesday.
Meanwhile, the yield on the two-year US Treasury note, which was highly sensitive to interest rate changes, edged a touch lower to 0.962% after rising for five days, Dow Jones Newswires reported.
Yields rise as prices fall. Higher interest rates also tend to boost the value of the dollar.
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