Foreign investors continue to snap up South African government bonds due to their attractive yield and the relative stability of the rand compared to the past. Local bonds have also benefited from the Reserve Bank implicitly shifting its inflation target towards the lower-end of its 3% to 6% range.
The South African government also appears to be repairing its battered finances, with it on track to meet its fiscal targets for the current financial year of stabilising its debt burden and running a wider primary surplus.
- The government’s tax revenue has increased by 10% year-on-year in comparison to a 4% rise in spending
- Eskom’s first profit in eight years has also helped boost the fiscal outlook
- Crucially, the country also has relatively deep and sophisticated capital markets, making them among the most attractive emerging markets for foreign investors
- Foreign investors continued to be net buyers of JSE-listed bonds in the second quarter of 2025, snapping up R22.8 billion worth
- This follows net purchases of R16.3 billion in the first quarter of the year
- Since the end of the second quarter, foreign investors have continued to pile into local bonds, buying R19.7 billion worth in July and August, JSE data showed.
- This means that foreign investors have bought a total of R58.8 billion worth of bonds in the first eight months of 2025 – significantly more than the R23.6 billion bought in the same period of 2024
- Foreign investors now hold more than 25% of domestic government bonds, up from 24.2% in November. This indicates increasingly positive sentiment towards South Africa’s financial health.
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Foreign investors continue to snap up South African government bonds
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