SA bonds lure investors

FOREIGN: NET INFLOWS OF R139BN IN 18 MONTHS

- Robert Brand and Mpho Hlakudi, Bloomberg

Foreign investors are flooding into South Africa's government bond market to take advantage of one of the best emerging-market trades of recent years.

The bonds have drawn net inflows of R139 billion in the 18 months through June, more than the previous four years combined, according to National Treasury data. The government of national unity (GNU) has proved key to sentiment, winning over investors with plans to reform the economy and improve state finances.

Inflows have continued this year, the data shows, despite bouts of selling sparked by wrangling over the budget in the first quarter and President Donald Trump's tariff threat in April.

The increased demand helped the debt return 29% in dollar terms over the year and a half through June, the most among major emerging markets after Argentina, according to data compiled by Bloomberg. The average for developing-nation local-currency debt was 9.2%, while the benchmark index for EM equities rose 14%.