Mozambique’s missed bond payment this week grabbed the headlines, but the market reaction was muted. Meanwhile, rising commodity prices have supported strong gains in South Africa’s currency and equity market. Mozambique’s slow-rolling debt crisis made headlines again when the country missed a US$60mn interest payment on its 2023 Eurobond on 18th January. S&P has now officially cut the country’s credit rating to “selective default”. Yields on the bond surged on rumours that the payment would be missed, but have come down again in recent days. Meanwhile, the country’s currency, which sold off sharply in 2016 following revelations that the government had concealed the true scale of its debts, has continued to recover lost ground against the dollar.
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