Bond today – A nice 9% for 12 years on a weak currency: how best to manage it

It's not just the BTP Valore that is attracting attention in the bond sector.
There are also supranational issues in emerging currencies, for two reasons: very high yields and very weak reference currencies against the euro, except in the case of the Mexican peso.
Are they then an opportunity? Yes, but only if you are able to aim for active management, which provides for possible further revenues in the presence of price corrections and further fragility of the relevant currencies.
In South African rand a AAA rating of 9% The listing of a Tsar issue with a significant coupon begins today on the Italian Stock Exchange.
However, its strong points are also others.
We analyze them: Denomination: Ifc (World Bank) 9% Ge36 Zar Isin: a first price report on 92 Zar, therefore clearly below parity.
The value is confirmed by the listing on the Frankfurt Stock Exchange, where the stock has been traded for the longest time.
South African Tsar, the point on the cross with the euro The currency of the black continent records extreme weakness, with the return to historic lows of 20.9 /21 Eur/Zar.
Despite being the most traded currency in the African context and being able to benefit from a possible de-dollarization in the emerging economies in the future, it is currently affected by the weakness of raw materials, of which South Africa is a major producer and exporter.
Overall, the inflationary situation is normalizing with a drop below 5%, while the trade balance remains positive, although far from the highs of 2021.
A thermometer of the currency's trend lies precisely in this indicator, given the strength of exports of commodities.
How to invest in the IFC 9% 2036 bond Considering the ongoing weakness of the price, with possible "entry levels" between 92 and 93 Zar, the currency variable will play a significant role in the performance of a possible investment in the new bond.
Consider that the average value of the Eur/Zar cross over the last ten years has stood at 16.6 (with a minimum of 21.1 and a maximum of 12.7 for the South African currency).
It is therefore clear that planning with possible subsequent positioning in the presence of a rand that breaks above the 21 level and therefore weakens further could constitute an interesting operation from a long-term perspective.
On the other hand, with a deadline of 2036, the margins for this to happen are more than significant.
DISCLAIMER The information and considerations contained in this article should not be used as the sole or primary support on which to make investment decisions.
The reader retains full freedom in his own investment choices and full responsibility in making them, since he alone knows his risk propensity and his time horizon.
The information contained in the article is provided for informational purposes only and its disclosure does not constitute and should not be considered an offer or solicitation to public savings.