* Bonds weaker, eyes on budget
* Rand rangebound vs dollar
JOHANNESBURG Feb 21 (Reuters) – South Africa’s
government bonds weakened on Tuesday, with investors trading
cautiously as they waited to see what Finance Minister Pravin
Gordhan’s budget says about the deficit and borrowing plans.
He is expected say on Wednesday that the budget will remain
in the red for longer than initial forecasts. Investors will be
particularly interested in how increased infrastructure spending
will affect the country’s borrowing requirement.
Demand at a weekly debt auction was quite subdued as
investors held back.
“There is some cautiousness ahead of the budget speech
tomorrow, and some revisions are expected to be made to the
deficit forecast,” said Anisha Arora, emerging market analyst at
4CAST.
Yields ticked higher on benchmark bonds, with the 2015 bond
yield rising 2.5 basis points to 6.615 percent and
that on the 2026 issue up 1.5 basis points to 8.23
percent.
A Reserve Bank survey showing its sentiment indicator fell,
pointing to modest growth this year, also added to the weaker
tone in the session.
The rand was softer, hitting a session low of
7.7499 against the dollar. By 1515 GMT, it was trading at 7.7150
to the dollar, 0.6 percent weaker than Monday’s New York close
of 7.6725.
Continued…
