LONDON, Dec 14 (Reuters) - South African sovereign dollar bonds rose across the curve on Monday as markets cheered the return of respected former finance minister Pravin Gordhan to the ministry, but yield premia over U.S. Treasuries stayed near 6-1/2-year highs.
Markets had sold off heavily last week after the sudden sacking of Finance Minister Nhlanhla Nene in favour of an ally of President Jacob Zuma. But in a U-turn over the weekend, Zuma reinstated Gordhan in a bid to draw a line under the market turmoil.
South Africa's 2044 bond rose 2.9 cents in the dollar, according to Tradeweb data, while the 2025 issue jumped 2.4 cents .
Sovereign yield spreads snapped in 14 basis points to 434 bps but stayed near 6-1/2 year highs on the EMBI Global index . Analysts were sceptical about the outlook for the assets, noting the need for more fiscal discipline and the looming U.S. rate rise.
"It would be warranted to see further widening in credit spreads and depreciation of the rand.. There are some concerns about how independent the finance minister can really be. I wouldn't expect to see much of an extension of the rebound beyond today's move," UBS strategist Manik Narain said.
(Reporting by Sujata Rao and Claire Milhench)