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
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