Politics drove direction and sentiment in the South African government bond market in the second quarter of 2024.
After a precipitous fall in ANC support at the May national elections (with the ANC falling to 40%, well below the 43-47% base case many had expected), a government of national unity (GNU) path between the ANC and other parties tentatively began to be forged.
This kickstarted what felt to investment market participants like a race against time, governed by the steady ticking of the procedural clock along Constitutionally laid out timelines, regardless of the hurdles different political parties attempted to throw in its path.
Given the tumult that SA investors have faced from political potholes in recent years, this steady ticking was somewhat comforting as this period of intense uncertainty was afforded only a limited timeline.
Two material events culminated during the month of June - firstly a statement of intent drafted primarily between the ANC, IFP and DA allowed for the election of the President and the National Assembly Speaker (and Deputy Speaker) within the Constitutionally prescribed 14-day period - the first key hurdle passed. The second milestone was the (eventual) announcement of President Ramaphosa's Cabinet at the end of June - but only after a fortnight of intense negotiations between the ANC and DA and a public...
