* Foreign accounts insistently buying local bonds
* Rand cushioned from bleak euro outlook
* Business confidence at its lowest since 2009
JOHANNESBURG, May 3 (Reuters) – Yields on South African
government bonds fell as prices were buoyed by offshore buying
on Thursday, helping to support the local rand currency in an
otherwise gloomy global environment.
An announcement last month that South African bonds will
likely be included in the prominent Citigroup World Government
Bond Index (WGBI) has piqued investor interest in Africa’s
largest economy.
Analysts say the WGBI factor has added an extra buy impulse
to local assets as it distinguishes South Africa from its
emerging market peers.
Yields fell across the curve and were down 5.5 basis points
to 6.345 percent on the very liquid three-year note
and were seven basis points lower at 8.065 percent on the
14-year issue.
“Emerging market bonds have been quite well supported; it’s
the whole story of looking for higher yields. And then South
Africa has this offshore bid at the moment where we’re seeing
big foreign inflows into the bond market,” said Vivienne
Taberer, a fixed income portfolio manager for Investec.
Bond exchange data shows foreign accounts picked up large
amounts of auction stock on Wednesday, in keeping with
relentless buying of local debt since the bond index
announcement.
Continued…
