SA bond rally fizzles out as investors await revised budget

SA bonds, which initially proved resilient after the country lost its last remaining investment-grade rating, are losing out on a revival in demand for riskier assets ahead of finance minister Tito Mboweni’s revised budget in a week.

Yields on SA 10-year debt have increased in each of the past eight days in their longest run of price declines since mid-March, about 10 days before Moody’s Investors Service pulled the plug on SA’s investment-grade rating, reducing it to junk with all three major ratings agencies.