Spreading Strikes Hijack Citigroup Debut: South Africa Credit

South African government bonds were the worst performers last week as spreading labor unrest, the first rating downgrade since apartheid and a widening trade deficit overshadowed the debt’s inclusion in a benchmark index.

Securities due in a year or longer lost 3.9 percent for dollar investors, with debt maturing in more than a decade retreating 4.9 percent, the biggest drop among 26 sovereign bond indexes compiled by the European Federation of Financial Analysts Societies and Bloomberg. The yield premium on rand-denominated notes over U.S. Treasuries rose to a one-month high, even after the debt was included in Citigroup Inc.’s World Government Bond Index.