Wednesday, 18 April 2012 00:41
JOHANNESBURG: The rand leapt and South African government bond yields logged their steepest drop in nearly three years on Tuesday as news that local debt could be included in Citigroup's main global bond index boosted demand from local and foreign accounts.
The rand jumped more than 1.8 percent against the dollar, performing the best among 20 emerging market currencies on the view that inclusion in Citigroup's World Government Bond Index could trigger billions of dollars worth of portfolio flows.
The yield on the 2026 issue fell as much as 30.5 basis points, the sharpest one-day fall since May 2009, before coming back to 8.155 percent by the close, down 24 basis points from Monday's level.
The yield on the three-year benchmark tumbled 21 basis points to 6.51 percent.
Citi said South Africa was currently in a three-month "monitoring period" to make sure it continued to meet index entry requirements to the WGBI. These are ...