By Roelof Botha

Dr Roelof Botha is economic adviser to the Optimum Investment Group.

Several emerging markets managed to provide positive returns to bond investors during 2021, with South Africa tops with a net yield of almost 9%.

The Christmas season brought good capital market cheer to South Africa, with gifts galore from a weaker dollar and a sterling performance by the country’s bonds.

According to Bloomberg’s ranking of 46 global bond markets, South Africa won the gold medal in 2021, outperforming every country of noteworthy credit credentials.

Despite lingering fears over the US Federal Reserve’s response to higher inflation and an imminent full recovery of the world’s largest economy, several emerging markets managed to provide positive returns to bond investors during 2021, with South Africa tops with a net yield of almost 9%. Despite declines in values, coupons for some of these bonds guaranteed sound positive returns.

Boosted by this achievement and another solid export performance, the rand reacted positively by ending the year below the level of R16 to the US dollar, gaining 1.3% during December and outperforming most of its emerging market peers.

During the first 11 months of 2021, exports amounted to more than R1.5-trillion, representing an increase of…

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