Johannesburg - South African government bonds firmed on Monday after S&P Global Ratings affirmed the country's investment-grade credit rating on Friday, but the rand failed to extend gains as the dollar recovered.
S&P left its BBB- rating on Africa's most industrialised economy but warned that its negative outlook reflected the potential adverse consequences of low GDP growth.
At 0757 GMT, the yield for the benchmark instrument due in 2026 was down 11 basis points to 9.09 percent, its firmest level since May 9.
Yields on South Africa's dollar-denominated bonds also fell, with the yields on the 2020, 2025 and 2041 issues slipping 2-3 basis points to the lowest levels since late-April.
The yield on the 2024 bond 836205AQ7 eased to the lowest since November 2015.
The rand traded at 15.1000 per dollar, unchanged from its New York close on Friday and trading at its strongest levels in three weeks.
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“Friday was the big one. The S&P announcement saw bonds turn positive and we are still hovering around the lows from Friday. The rand is also still hovering around the same levels,” said WWC Securities chief trader Marten Banninga.
“There is a lot of uncertainty that remains in this world. What is going to happen in US with the short term rates? The uncertainty came from Friday's jobs data.”
Weak US jobs data quashed expectations for a near-term U.S. interest rate hike, boosting appetite towards riskier but high-yielding emerging market assets.
On the stock market, the Top-40 index was down 0.38 percent 47,900 while the broader all-share fell 0.27 percent at 54,113 percent in early trade.
REUTERS