JOHANNESBURG Aug 17 (Reuters) – South Africa’s rand
weakened against the dollar on Friday partly hit by a dip in
sentiment a day after a police crackdown on striking miners at
Lonmin left more than 30 people dead.
Yields edged higher as government bonds also weakened
although local debt still holds appeal in the long term because
of much higher returns that those offered by safer havens.
By 0644 GMT the rand was 0.34 percent weaker at
8.2510 against the dollar after closing at 8.2230 in New York on
Thursday.
“The mining story has gotten a lot of international play and
I see it affecting short-term sentiment although I don’t see it
lasting too long,” a rand trader in Johannesburg said.
Heavily armed South African police patrolled Lonmin’s
Marikana platinum mine on Friday after the crackdown, which drew
comparisons with apartheid-era brutality.
Governments retreated slightly, and the yield on the heavily
traded 14-year government bond edged up half a basis
point to 7.67 percent while that for the three-year bond
was up one basis points at 5.595 percent.
South Africa’s yield spread over US Treasuries and many
other developed market bonds remains attractively wide,
Tradition Analytics said in a note.
“Portfolio flows into South Africa are not therefore likely
to dry up completely any time soon,” it added.
(Reporting by Stella Mapenzauswa; Editing by David Dolan)
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