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Treasury is reducing its weekly auction of government bonds for the second time since the end of March.
Government debt has ballooned during the pandemic.
But thanks to stronger-than-expected tax collection, government does not have to borrow as much as expected.
For the second time in more than a month, the South African government cut the size of its bonds on auction.
This is thanks to better-than-expected tax income, which means it doesn’t have to rely as much on new debt as was previously expected.
On Monday, National Treasury announced that it will reduce its weekly auction of fixed-rate government bonds by R900 million – from R4.8 billion to R3.9 billion, starting from next week. It will continue to auction R1.2 billion in inflation-linked bonds.
We’ve heard a lot about the immense challenges South Africa faces on the economic front. But what is it going to take to start making inroads into these? It appears that there’s agreement on a few varied fronts that the answer is 3% real economic growth. Not “now you see it, now you don’t” growth, but a sustained 3%-plus growth rate until the foundations of a revitalised and healthy economy have been laid.
This week different sources of analysis all came together to settle on this magic number, particularly when it comes to what is needed to address two of South Africa’s greatest downside risks: a government debt default and sky-high unemployment.
MONEYWEB
app instead?
Large multi-asset funds lose ground.
By Patrick Cairns
21 Jan 2021 00:01
The Allan Gray Balanced Fund saw net withdrawals of R13.3bn but is still comfortably the largest unit trust in the country. Image: Supplied
Local investors appear to be losing some of their affinity for the countryâs largest multi-asset unit trusts.
According to Morningstar data, eight of the 10 local funds with the highest net outflows last year are among South Africaâs 25 largest unit trusts overall. Four of them are in the top 10 by size.
All 10 of the funds that experienced the most substantial net outflows last year are multi-asset portfolios. Five are high equity funds, three are low equity funds, and there is one each from the multi-asset flexible and multi-asset income categories.