Johannesburg - Domestic bond yields spiked on Wednesday before easing back after Finance Minister Pravin Gordhan targeted the wealthy with tax hikes, underscoring the challenge of boosting revenues to plug the budget gap.
The benchmark 2016 issue bond softened while Gordhan spoke, with the yield rising 6 basis points at one point to 8.79 percent. At 5.20pm, it had recovered a bit to 8.765 percent.
“While borrowing requirements are not substantially changed, the overall mix of measures, even with further attempts to cut spending, will do very little to boost confidence,” said Razia Khan, Standard Chartered Bank’s, chief Africa economist.
Meanwhile, the rand was little changed. At 5pm, the local unit was bid at R13.1178 to the dollar, 2.73c firmer than at the same time on Tuesday.