Bonds mixed as market waits for possible Cabinet reshuffle

23 February 2018 - 15:59 By Karl Gernetzky
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President Cyril Ramaphosa during his response to the debate on the state of the nation address in Parliament mentioned that he will be reshuffling cabinet soon.
President Cyril Ramaphosa during his response to the debate on the state of the nation address in Parliament mentioned that he will be reshuffling cabinet soon.
Image: Esa Alexander

Local government bonds were mixed on Friday afternoon‚ with longer-dated paper firmer‚ in line with the rand‚ as the market watched for a shake-up of government departments.

Analysts said there should be some position-squaring ahead of the weekend‚ when the ANC national executive committee (NEC) will meet.

There is much speculation that President Cyril Ramaphosa will reshuffle the Cabinet soon‚ as he seeks to consolidate his authority and begin implementing more market-friendly policies.

The rand was also finding some support as markets processed views that Wednesday’s budget had averted a downgrade by ratings agency Moody’s. Globally‚ various US policy makers had downplayed recent US Federal Reserve minutes that had been widely perceived by the market as hawkish.

Ratings agency Fitch‚ which considers South African debt as junk‚ said earlier SA’s budget has reversed some of the fiscal deterioration seen in 2017 – particularly during the medium-term budget policy statement.

“However‚ the need to fund expenditure measures announced in recent months means the consolidation envisaged is relatively modest‚” Fitch said.

At 3pm the R186 was bid at 8.04% from 8.01% and the R207 at 6.650% from 6.575%.

The rand was at R11.5744 to the dollar from R11.6558.

The US 10-year treasury was last seen at 2.8879% from 2.9189%.


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