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South Africa’s dollar bonds are among the worst performers among EMs, dropping by 4.4% since the beginning of the year. This performance comes on back of upcoming elections where investors are said to be concerned about a market unfriendly coalition government. South Africa will go under the polls on May 29. Bloomberg notes that the elections are expected to be the toughest test for its ruling party African National Congress (ANC) as there is discontent among voters due to frequent power blackouts and party’s failure to deal with corruption. They note that the CDS spread of the nation has climbed up by 53bp in 2024 while that of its peers has remained flat, indicating heightened uncertainty.
South Africa’s 4.3% 2028s have dropped from 93.6 since the start of the year to 90.6 cents on the dollar, currently yielding 6.76%.