LOCAL bonds and the rand, through carry trades, are likely to remain the preferred asset classes among investors with general equities under threat, warn analysts.Carry trades refer to the practice of foreigners buying currencies in a bid to obtain higher interest rate yields.Bonds have been the best asset class so far in 2016, delivering growth of 11.7%, followed by property stocks with 7.6% and other equities with 5.8%.The rand has firmed 7.5% in 2016 against the dollar, shrugging off negative news such as Moody’s reviewing five state-owned enterprises for a possible investment downgrade.Analysts say the market is awaiting this week’s US Federal Reserve rate decision with seemingly little attention being paid to other market developments.But TreasuryOne dealer Andre Botha says it would be a mistake to underestimate the rand’s potential volatility. "The present thin liquidity can cause quite sudden shifts," he said.That was evident at the end of last week when it firmed to R14.10 t...
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