South Africa Steps Back Into the Global Spotlight - Are You Investing?

South Africa is back in the global spotlight, as the country’s successful exit from the FATF greylist marks a major milestone in restoring its reputation and strengthening its commitment to fighting financial crime and improving transparency.

This achievement has boosted confidence among investors and global institutions, reaffirming South Africa’s position as a trusted and credible financial partner.

Local Bond Market 

The positive momentum is already showing in the markets. South Africa’s benchmark 10-year bond yield recently dipped below 9%, its lowest since 2018, reflecting improved investor sentiment and stronger demand for local assets. With the Reserve Bank targeting lower inflation of around 3%, the country’s macroeconomic outlook is improving, supported by credible monetary policy and renewed fiscal discipline.

Source: South African Reserve Bank 

Global investors continue to take notice. Recently, BlackRock has named South African local-currency bonds among its top emerging-market picks as concerns about U.S. debt and dollar weakness grow. “Yields in South Africa look very high - both nominal and real - while inflation is not too bad,” said Ben Powell, BlackRock’s Chief Asia-Pacific Investment Strategist. The combination of attractive yields and improving fundamentals is drawing new interest to South African bonds.

“Retail investors in EasyBonds have enjoyed the distribution of more than R14m in coupons since inception, as well about 10% in capital appreciation just this year, depending on which bonds were purchased," says Nilan Morar, VP of Trading and Head of Product.

SA Bond Index

A bond index tracks the performance of a group of bonds, showing overall market trends in prices and yields. In South Africa, the FTSE/JSE All Bond Index (ALBI) measures the performance of local government and state-owned bonds.

The FTSE/JSE All Bond Index has, according to Bloomberg, returned 27% in dollar terms this year, helped by a stronger rand. Foreign investors have added more than R90 billion to local bonds through September. “Capital tends to move slowly, and then all at once,” Powell said. “If South Africa keeps providing a sense of normalcy and stability, that would be quite encouraging for global investors.”

Confidence is also rising domestically. Eskom’s stabilising grid and progress on economic reforms have restored optimism, while global giants like Amazon and Walmart are expanding operations in South Africa. “If the lights stay on, the capital will come back,” Powell added, a sentiment that could perfectly capture the country’s turning tide. 

Round Up 

For retail investors, this renewed optimism presents a clear opportunity. South African government bonds are available on EasyEquities with no minimum investment, allowing anyone to participate in the country’s comeback story. “Retail investors in EasyBonds have received more than R14 million in coupon distributions since inception, along with roughly 10% in capital appreciation this year, depending on the bonds purchased,” says Nilan Morar, VP of Trading and Head of Product. As the “Local is Lekker” movement gains momentum, investing in local bonds is not only a smart choice but also a way to contribute to South Africa’s potentially brighter financial future.

Sources – EasyEquities.

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