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ABSA Retains Significant FI Allocation, but Wary of Yield Slippage

SOUTH AFRICA

ABSA Investment Strategist on SA Markets:

  • Notwithstanding deteriorating govt debt levels, a widened fiscal deficit and credit ratings downgrades, Absa maintains a significant allocation to local fixed-income securities.
  • due to above-inflation real yields to maturity, attractive coupon rates and alternative systematic risk to equity markets, allowing for diversification
  • However, we are wary of potential yield slippage on the longer-end should the fiscus deteriorate further. We therefore advocate for a duration-neutral strategy within local fixed-income securities
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

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