that’s the view from the likes of strategists at goldman sachs group inc deutsche bank ag and credit agricole sa after the country’s rand fell to a record low and local bonds collapsed to send yields to the highest since the pandemic struck the calls for a turnaround are based on the country’s assets looking cheap after the selloff and a slowdown in us rate hikes rather than expectations for a sudden improvement in the economy or politics while there’s plenty of bad news it’s mostly priced in they argue “given how far south african asset prices have already fallen we think it more likely that markets will stabilize close to current levels with moderate upside to the rand in the short term and more considerable upside to bonds both local and external in the medium term” said goldman strategists including kevin daly targeting 4 rand gains within three months to 1875 per dollar that chimes with a call just out from credit agricole for 18 per dollar by september last week deutsche bank strategists including christian wietoska moved the nation’s localcurrency bonds to “strong overweight” due to “ extremely cheap” valuations forecasting 10year yields at 10 versus over 12 currently the calls may already be drawing investors the rand rallied nearly 1 friday and south africa’s dollar bonds climbed to send yields on 2030 notes down 28 basis points the most since november a rand recovery to around 18 per dollar would still leave it down for the year so far the currency crashed to a record low near 20 on thursday and is 13 weaker in 2023 making it the worstperformer among developingnation peers after the argentine peso heavy power cuts in africa’s most industrialized economy have weighed on the currency throughout the year simultaneously fanning inflation and lowering potential growth that’s put monetary policy in a difficult position as more interestrate hikes to stem inflation will depress already low growth on top of that geopolitics has been the latest trigger for weakness as traders assess pretoria’s relationship with russia president vladimir putin’s potential visit to south africa for a summit in august will likely keep sentiment fragile the goldman sachs strategists said that while there is a risk further bad news could cause asset prices to fall more valuations are now unusually weak implying that the market is already discounting it meanwhile credit agricole’s call is based on seeing some government action to improve the economy “for this appreciation potential to materialise the government would need to tackle the issue of the power outages more effectively in order to restore market confidence” said analysts including sebastien barbe in a note to clients