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Johannesburg - South African bonds were steady on
Wednesday as offshore interest and a positive Eskom auction ushered in some
buying, while any concerns of rand weakness failed to materialise.
By 15:46, the short-term government R154 bond was bid at 7.070% from a
previous close of 6.955%. The medium-term R157 was at 8.285% from 8.280%,
while the long-term R186 was at 8.880% from 8.885% before.
The rand was bid at 7.3528 to the dollar from a previous close of
7.3703.
A senior bond dealer told I-Net Bridge that good offshore buying, some
demand out of Cape Town and multi-managers increasing their weighting had
helped push yields stronger.
"However, my personal view is this dollar index may have reached a
bottom - or have one last stab - before resurging," he said.
The dealer explained that the rand has been a factor helping improve
bonds, with the weak dollar ushering in risk appetite from offshore.
"The market repriced late yesterday afternoon and there has not been
much today," he said.
Another dealer said that there was a bit of strength at noon after a
well bid Eskom auction of R500m.
A further dealer explained that talk of a sizeable corporate deal had
led to the position of investors needing to either pay swaps or sell some
more bonds, with the result that yields had moved weaker.
"We are worried about Eskom and talk around fixing the currency - but
the rand is still strong, so there has been no movement on that," said the
dealer.
Foreigners were net buyers of R1.547bn worth of South African
bonds including repo transactions on Tuesday after net purchases of R155.709m worth of local bonds on Monday, Bond Exchange of South Africa
statistics show.
Nominal cumulative volume was R27.615bn on Tuesday from R14.653bn on Monday.
Foreigners were net buyers of R1.824bn worth of South African
bonds, excluding repo transactions, on Tuesday after net purchases of
R155.511m worth of local bonds on Monday.
On a year-to-date basis, foreigners have been net buyers of R20.001bn worth of local bonds, excluding repo transactions.
On a year-to-date basis for total transactions, including repo
transactions, foreigners have been net sellers of R9.236bn worth
of bonds.
- I-Net Bridge