Bond Yields continued to trend higher in response to higher-thanexpected inflation readings in the United States and South Africa. The South African Reserve Bank opted to keep the Repo rate unchanged and maintain elevated interest rates.

Risk-off trading drove a sell-off in South African Government Bonds (SAGBs) as offshore investors decreased holdings of SAGBs. Namibian Government Bonds performed better than SAGBs, with spreads between them compressing by 50 Bps across the curve.

Money market rates in South Africa ticked up as expectations of higher rates for longer propped up bank deposit rates. Namibian banks' deposit rates also repriced higher.
Namibian Treasury Bills are trading at a premium to South African Treasury Bills, with local 12-month Treasury Bills yielding above 9%. Volatility in the market is expected to increase as elections approach in both Namibia and South Africa; however, the Fund is well-positioned to provide robust risk-adjusted returns.