* Bonds yields post steepest one-day drop in 3 years
* Analysts see flows of up to $9 bln into bonds
* Rand gains as much as 1.9 percent against dollar
By Stella Mapenzauswa
JOHANNESBURG, April 17 (Reuters) – The rand leapt and South
African government bond yields logged their steepest drop in
nearly three years on Tuesday as news that local debt could be
included in Citigroup’s main global bond index boosted demand
from local and foreign accounts.
The rand jumped more than 1.8 percent against the dollar,
performing the best among 20 emerging market currencies on the
view that inclusion in Citigroup’s World Government Bond Index
could trigger billions of dollars worth of portfolio flows.
The yield on the 2026 issue fell as much as 30.5
basis points, the sharpest one-day fall since May 2009, before
coming back to 8.155 percent by the close, down 24 basis points
from Monday’s level.
The yield on the three-year benchmark tumbled 21
basis points to 6.51 percent.
Citi said South Africa was currently in a three-month
“monitoring period” to make sure it continued to meet index
entry requirements to the WGBI. These are based on issue size,
ease of entry and credit rating, all of which were passed in
April.
Continued…
