Markets News

S.Africa bonds rally after Moody's rating reprieve

LONDON, Nov 4 (Reuters) - South Africa’s dollar-denominated sovereign bonds jumped and yields of the local 10-year benchmark eased on Monday after Pretoria escaped a relegation to “junk” status by ratings agency Moody’s in the wake of last week’s bleak mid-term budget.

Local bond yields eased across the curve with the 10-year benchmark yield slipping to 8.4%, a 18 basis points decline from the Friday close, according to Refinitiv data.

Meanwhile, longer-dated Eurobonds bonds enjoyed the biggest gains with the 2041 issue adding as much as 1.5 cents in the dollar to trade at 109.028 cents, Tradeweb data showed. That was the largest daily gain in 4-1/2 months.

Late on Friday, Moody’s left South Africa on the brink of “junk” status after it revised the outlook on the country’s last investment-grade credit rating to “negative,” piling pressure on President Cyril Ramaphosa to quicken the pace of reform.

Reporting by Karin Strohecker, editing by Marc Jones