Rand, bonds strengthen on NPA withdrawal of summons against Pravin Gordhan

South African bonds were much stronger at midday on Monday‚ taking their cue from a rand that firmed almost 20c to the dollar‚ after the National Prosecution Authority (NPA) withdrew a summons against Finance Minister Pravin Gordhan and former SARS officials Oupa Magashula and Ivan Pillay.

The rand was trading at two-month firmest levels against the greenback after NPA head Shaun Abrahams said in a letter to Gordhan’s attorney on Monday he had decided to “overrule the decision” to prosecute the minister.

Gordhan was set to face two fraud charges after approving the early retirement of the former deputy SA Revenue Services deputy commissioner Pillay and reappointment him on a contract.

The yield on the R186 bond was at 8.740% at midday from 8.865% on Friday.

The yield on the R207 bond was at 7.970% from 8.100% previously.

The rand was trading at R13.6348 to the dollar form R13.8143 on Friday.

On the data front‚ the South African balance of trade figure is due for release at 2pm on Monday with a deficit of R1.1bn widely expected.

Global and local investors are also waiting for the US Federal open market committee meeting on Wednesday and the release of the US nonfarm payrolls data on Friday.

The 10-year US treasury note was last seen yielding little changed at 1.8443%‚ from 1.8478% on Friday.

— TMG Digital/BusinessLIVE

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