Yields trend higher as investors flee emerging markets debt

South African bond yields were elevated on Thursday morning as investors fled emerging market debt.

At 8.40am‚ the benchmark R186 bond was bid at 8.205% and offered at 8.200% from Wednesday’s close of 8.155%.

The middle-dated R207 was bid at 7.670% and offered at 7.645% from its previous close of 7.605%.

The International Monetary Fund (IMF) on Wednesday warned that emerging markets should brace themselves for more volatility‚ Dow Jones Newswires reported.

The fund‚ in its semiannual assessment of risks to the global financial system‚ said the fallout from the end of easy-money policies by central banks could stall the world’s economic expansion‚ expose lofty asset prices and weigh on overextended lenders.

"Policy missteps or adverse shocks could result ... in prolonged global market turmoil that would ultimately stall economic recovery‚" IMF financial counsellor Jos Vials said.

Investors were already pulling cash out of developing economies as growth prospects dimmed‚ commodity prices plunged and borrowing costs rose‚ the newswires said.

- BDlive