Long-term bonds reached a bid-to-cover ratio as high as 5.2 times; South Africa’s auction demonstrates the depth of local capital.

(1) The South African Treasury completed three long-term government bond auctions on Wednesday, raising a total of 8.5 billion rand. The winning rates for all maturities exceeded 8.5%. (2) The 2038 bond auctioned at a size of 850 million rand, with a clearing yield of 8.575% and a bid-to-cover ratio of 5.2 times. (3) The 2040 bond auctioned at a size of 850 million rand, with a clearing yield of 8.780% and a bid-to-cover ratio of 4.6 times. (4) The 2044 bond auctioned at a size of 850 million rand, with a clearing yield of 8.900% and a bid-to-cover ratio of 3.3 times. (5) Based on the trend of decreasing bid-to-cover ratios as maturity lengthens, there is some market divergence on ultra-long-term interest rate levels, but overall subscription enthusiasm remains high. (6) Against the backdrop of a global interest rate environment and uncertainty in South Africa's domestic economic outlook, all three bond offerings were oversubscribed, reflecting that local institutional demand for asset allocation remains robust.