BlackRock Backs South African Bonds Amid US Debt Concerns

South African local-currency government bonds are becoming a top pick for investors seeking an alternative to US Treasuries amid worries about a weaker dollar and rising government debt, according BlackRock Inc.

The yield on the South Africa’s benchmark rand-denominated 2035 bonds is around 8.9% after falling more than 2 percentage points since April. That still represents a premium of almost 5 percentage points over similar-maturity US Treasuries. Inflation in Africa’s most industrialized economy is seen slowing to about 3% by 2027 as the central bank pursues a lower target.