Auction Suggests Investors Losing Taste for South African Bonds
- Demand at weekly fixed-rate auction fell to lowest since March
- Yields rise after government increased issuance second time
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Bond investors are losing their appetite for South African debt after the government increased issuance a second time this year to help plug a yawning budget deficit.
Demand at the weekly fixed-rate bond sale on Tuesday fell to the lowest since the height of the Covid-19 selloff in March. The nine primary dealers that buy bonds directly from the government placed orders of 12.97 billion rand ($758 million) for the 6.6 billion rand of securities on sale. That’s a bid-to-cover ratio of 2, compared with 2.2 at the previous sale.