July 2 (Bloomberg) -- The rand gained and bond yields fell to the lowest in two weeks on optimism that a pact between labor unions and mining companies will boost South African growth.
The mining-stability agreement, brokered by Deputy President Kgalema Motlanthe, will be signed tomorrow after it was concluded on June 28, Thabo Masebe, a government spokesman, said yesterday. It’s meant to eliminate the intimidation, labor violence and unprotected mine strikes that 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.
The currency gained 0.3 percent to 9.9062 per dollar as of 3:40 p.m. in Johannesburg. Yields on benchmark 10.5 percent bonds due December 2026 dropped four basis points, or 0.04 percentage points, to 7.86 percent, the lowest since June 17. The rate declined 46 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 reporter on this story: Robert Brand in Cape Town at firstname.lastname@example.org
To contact the editor responsible for this story: Vernon Wessels at email@example.com