Johannesburg - The rand weakened against the dollar on
Friday partly hit by a dip in sentiment a day after a police crackdown on
striking miners at Lonmin [JSE:LON] left more than
30 people dead.
Yields edged higher as government bonds also weakened
although local debt still holds appeal in the long term because of much higher
returns that those offered by safer havens.
By 06:44 GMT the rand was 0.34% weaker at R8.2510 against
the dollar after closing at R8.2230 in New York on Thursday.
“The mining story has gotten a lot of international play and
I see it affecting short-term sentiment although I don’t see it lasting too
long,” a rand trader in Johannesburg said.
Heavily armed South African police patrolled Lonmin’s
Marikana platinum mine on Friday after the crackdown, which drew comparisons
with apartheid-era brutality.
Governments retreated slightly, and the yield on the heavily
traded 14-year government bond edged up half a basis point to 7.67% while that
for the three-year bond was up one basis
points at 5.595%.
South Africa's yield spread over US Treasuries and many
other developed market bonds remains attractively wide, Tradition Analytics said in a note.
“Portfolio flows into South Africa are not therefore likely
to dry up completely any time soon,” it added.
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