HSBC Turns Bullish on S. Africa, Recommends Long-Bond Position
Alert: HALISTER1
Source: BFW (Bloomberg First Word)
People
Steven Major (HSBC Bank PLC)
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UUID: 7947283
(Bloomberg) -- Raises South Africa to bullish, recommends buying 2030 government bonds in report dated June 7.
- “Despite political risks, confidence should be buoyed by the favorable macro backdrop,” HSBC strategists led by Steven Major, global head of fixed-income research, say in report
- Entered trade May 30 at 9.09%, target 8.48%, stop 9.62%
- NOTE: Debt yielded 9% by 10:04am in Johannesburg
- “Weak growth and disinflation in the absence of any policy easing bias argue for a flatter yield curve”
- Risks: Any rise in political uncertainty
- HSBC view “looks through near-term political risk and focuses on fundamental value”; high carry, low volatility stay supportive of local-currency EM bonds
- “Local market volatility in Brazil and South Africa is likely to be contained and provide re-entry opportunities”
- HSBC also recommends 20-year Indonesia sovereigns, Brazil front-end receivers
- NOTE: S. Africa Has Second Recession in 8 Years as Economy Shrinks Link
Alert: HALISTER1
Source: BFW (Bloomberg First Word)
People
Steven Major (HSBC Bank PLC)
To de-activate this alert, click here
To modify this alert, click here
UUID: 7947283