Rand Gains as Yields Fall to Two-Week Low on Mines-Pact Optimism
The rand gained and bond yields fell to the lowest in two weeks on optimism a pact between labor unions and mining companies will boost growth.
The mining-stability agreement, brokered by Deputy President Kgalema Motlanthe, was concluded on June 28 and will be signed tomorrow, government spokesman Thabo Masebe said yesterday. The pact is meant to eliminate intimidation, labor violence and unprotected strikes at mines which contributed to the rand’s 14 percent slide this year, Motlanthe said on June 21.
“Any formalized agreement would be seen as a positive sign for the sector,” Kuvasha Naidoo and Asher Lipson, fixed-income analysts at Standard Bank Group Ltd. in Johannesburg, said in e-mailed comments. Mining accounts for more than half of South Africa’s exports.
South Africa’s currency gained 0.4 percent to 9.9863 per dollar as of 10:04 a.m. in Johannesburg. Yields on benchmark 10.5 percent bonds due December 2026 dropped three basis points, or 0.03 percentage points, to 7.88 percent, the lowest since June 17. The yield has declined 44 basis points in the past six trading days.
Foreign investors bought a net 1.26 billion rand ($127 million) of South African bonds yesterday, adding to 445 million rand of purchases last week, according to JSE Ltd. data.
To contact the editor responsible for this story: Vernon Wessels at firstname.lastname@example.org
Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.