Best news for the rand in three years

South Africa raised $3.5 billion in a sale of dollar bonds that attracted demand for almost four times that amount, the latest sign of investors flocking to the nation’s financial assets.

Africa’s biggest economy priced $1.75 billion each of 12- and 30-year bonds at yields of 6.25% and 7.375% respectively on Thursday, according to a person familiar with the matter who asked not to be identified as they’re not authorized to speak publicly. That compares with yields of 7.1% and 7.95% on similar-maturity notes issued in November 2024.

Bids for the securities totaled more than $13 billion, the person said.

“With the current bullish sentiment towards emerging markets, it’s unsurprising that high-beta names like South Africa are attracting significant interest,” said Dario Scheurer, a portfolio manager at Vontobel Asset Management.

“Investors are looking to add risk, supported by the positive 2026-outlook for emerging market hard-currency debt from major investment banks, along with steady inflows into the asset class.”

South Africa joins Nigeria, the Republic of Congo, Kenya and Angola in tapping foreign-currency markets this year as resilient global growth and expectations of further US interest-rate cuts fuel investor appetite for riskier assets.

The average spread for African sovereign debt over US Treasuries has narrowed by 314 basis points since April to about 342 basis points, according to JPMorgan Chase & Co. indexes.

South African assets have rallied in recent months as investors bet on an improving economic outlook.

The country is benefiting from government reforms aimed at removing bottlenecks to growth, its commitment to fiscal discipline, the adoption of a lower 3% inflation target and stronger-than-expected revenue collection — factors that led S&P Global Ratings to upgrade the country last month. Moody’s Ratings is scheduled to provide an update on its assessment later on Friday.

The rand is trading at its strongest level in almost three years; it strengthened 0.2% to R16.94 per dollar by 12:54 p.m. in Johannesburg on Friday. The nation’s 10-year government bond yield is at the lowest in more than eight years.

South Africa’s National Treasury said it would respond later to a request for comment.