Share

Bonds 2bps weaker on Tobin tax talk

Johannesburg - South African bonds were two basis points weaker on Tuesday as speculation of a tax on volatile investment flows dampened sentiment. It is viewed that such a tax could crimp back robust foreign investment in SA paper.

By 15:56 the benchmark R157 bond was at 7.610% after closing at 7.590% on Monday and the 10-year R207 was at 8.290% from 8.280% previously. The long-term R186 was at 8.490% from 8.450% at its previous close.

The rand was bid at R7.2677 to the dollar from R7.2935 at its previous close and off a worst level this morning of R7.2957.

Foreign buying of local bonds and shares has rocketed so far this year, driven mainly by revived global risk appetite and boosting the currency to levels widely seen as harmful to the economy.

A trader said bonds had tracked the rand weaker in early trade on the basis of the talk around the tax. However, analysts soon cautioned that this was mere speculation and the rand improved a little, with bonds then tagging along.

However, sentiment still remains a little edgy as SA markets continue to be beholden to fickle international sentiment.

Nedbank Capital say bonds were on the back foot on speculation SA's ruling party, the ANC, is considering a tax on foreign capital inflows, possibly stemming current robust foreign investment in SA government paper.

The other key indicator for the market has been the rand.

Foreigners were net sellers of R224.388m of South African bonds including repo transactions on Monday, after net purchases of R468.673m of local bonds on Friday, Bond Exchange of South Africa statistics show.

Nominal cumulative volume was R55.475bn on Monday from R50.644bn on Friday. 

Foreigners were net sellers of R217.391m of South African bonds excluding repo transactions on Monday after net purchases of R468.412m of local bonds on Friday.

In the year to date foreigners have been net buyers of R56.133bn worth of local bonds, excluding repo transactions.

So far for total transactions, including repo transactions, foreigners have been net buyers of R48.583bn worth of bonds.

In 2009 foreigners were net buyers of R27.755bn worth of local bonds, excluding repo transactions, while for total transactions, including repo transactions, foreigners were net sellers of R2.424bn worth of bonds. 

  - I-Net Bridge
We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.90
+0.2%
Rand - Pound
23.86
+0.2%
Rand - Euro
20.37
+0.3%
Rand - Aus dollar
12.31
+0.2%
Rand - Yen
0.12
+0.2%
Platinum
908.05
0.0%
Palladium
1,014.94
0.0%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders