Doubts about SA weigh on bond auction
State borrowing costs increase after Gigaba speech
Bond markets remain spooked by South Africa's deteriorating fiscal position, judging by this week's government bond auction, which showed that borrowing costs for the state continued to rise following last month's medium-term budget policy statement. The problems stem from politics, with a possible downgrade towards the end of this month by ratings agencies and the still unsettled matter of the nuclear build programme. Although Finance Minister Malusi Gigaba has stated that a nuclear project is unaffordable right now, political machinations are at play to get the close to R1-trillion project back onto the table. The government bond auction on Tuesday was oversubscribed, but the yield on the bond, which will mature in 2040, was 18 basis points higher than last week, at 10.225%. Wayne McCurrie, an analyst at Ashburton Investments, said government had increased the amount of debt issued from R2.65-billion on average per week to R3.3-billion since the medium-term budget."There will have...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.