South African bonds reversed from earlier weakness and were marginally firmer shortly before midday on Tuesday‚ as markets eyed the no-confidence vote in President Jacob Zuma later in the day.
Analysts said trade was expected to be cautious ahead of the vote‚ but emerging markets rose slightly due to global factors.
Local bonds had gained on Monday‚ tracking the rand‚ shortly after National Assembly speaker Baleka Mbete said the vote would be conducted via secret ballot.
Most analysts had not expected this‚ with Nomura emerging markets analyst Petter Attard Montalto putting the chance of Zuma’s removal at 30%.
Sasfin Securities analysts said the reaction from the rand and bonds indicated that the market had not priced in Mbete announcing that the vote would be secret.
A softer dollar and the US inflation print later in the week had helped lift emerging-markets assets‚ said TreasuryOne currency dealer Gerard van der Westhuizen.
At 11.30am the R186 was bid at 8.55% from Monday’s 8.56%‚ and the R207 was at 7.325 from 7.33.
The rand was at R13.2216 to the dollar from R13.2248.
Source: TMG Digital.