December 18, 2017 / 5:16 PM / a year ago

S.Africa dollar bonds extend gains as Ramaphosa elected ANC leader

LONDON, Dec 18 (Reuters) - South Africa’s sovereign dollar bonds extended gains on Monday after the ruling ANC party declared Deputy President Cyril Ramaphosa its next leader, with some longer-dated issues up as much as 1.5 cents on the day.

The 2044 issue rose 1.6 cents to 99.3 cents in the dollar, according to Tradeweb, the highest level since mid-September and the 2041 bond rose 1.3 cents to 110.3 cents, also a three-month high.

They were trading around one cent higher before the announcement.

Investors view Ramaphosa as the more market-friendly candidate, and his election could pave the way for crucial structural reforms.

“Markets are taking the view that ratings downgrades in late February to early March, when the Moody’s review is due, may not happen, at least at that review, and there is a greater chance of political reforms as Ramaphosa does have a strong market track record,” said Manik Narain, a strategist at UBS.

The rand is trading almost 4 percent firmer on the day, having risen in anticipation of the announcement. (Reporting by Claire Milhench; editing by Sujata Rao)

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