Bonds issued by the government and Eskom rallied on Wednesday after finance minister Enoch Godongwana delivered a medium-term budget that outlined radically improved fiscal debt projections. The yield on the R2030 bond, which pays an 8% coupon and matures on January 31 2030, fell 16 basis points from the previous day’s close to 10.74% at 4.51pm. Before Godongwana’s medium-term budget policy statement the yield, which moves inversely to the underlying security’s price, was at 10.79%. The yield on debt due in March 2032 fell 13 basis points from the previous close to 11.29%. Eskom ’ s 8.45% dollar denominated bond due in August 2028, which does not enjoy a government guarantee, saw its yield fall 76 basis points from the previous close to 11.47%. Equities were also stronger, with the JSE all share index adding 1.8%. An index of banking stocks climbed 3%. The rand gained as much as 1.3% to R17.9577/$ shortly after the medium-term budget was released before paring gains to trade at R17.9680/$. The government’s consolidated budget deficit is now expected to fall to 4.9% of GDP for the fiscal year to end-March 2023, well below the 6% forecast in February’s budget. Godongwana also said the government […]
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