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South African bonds lose ground on rand
15:27
South African bonds weakened a little during the morning session on Monday as the rand softened a tad in the wake of a Jacob Zuma court ruling and on generally poor global sentiment.
By 11:48 the short-term government R153 bond was bid at 7.535% from its previous close of 7.470%. The medium-term R157 was at 7.555% from a previous 7.495%, while the long-term R186 was bid at 7.630% from 7.520%.
The rand was last at 9.9332 to the dollar from a previous close of 9.8020.
"We are a little bit weaker, and after running hard we are undergoing a correction, or retracement. We are watching the rand, which also seemed to lose some ground after the Jacob Zuma judgment," said a senior bond dealer.
"One of my concerns is how we weather the storm of general external shocks," said the dealer. He wondered how the central bank would look at these types of risks when it came to cutting interest rates.
"There may not be enough control to make bigger cuts than 50 basis points," concluded the dealer.
This comes after the Supreme Court of Appeal upheld an appeal by the National Director of Public Prosecutions against a court ruling that effectively halted ANC leader Jacob Zuma’s graft prosecution.
Foreigners were net sellers of 577.992 million rand worth of South African bonds on Friday after net purchases of 323.076 million rand worth of local bonds on Thursday, Bond Exchange of South Africa statistics show.
Nominal cumulative volume was 23.851 billion rand on Friday from 36.978 billion rand on Thursday.
