Johannesburg - The South African bond market was slightly
softer in nervous midday trade on Friday after the inflation linked bond (ILB)
auction at 11am and ahead of the inclusion of SA government bonds in the World
Government Bond Index (WGBI) at 5pm.
“Traders are nervous so we are seeing good two-way volumes.
The I2038 saw good demand at the auction‚ but the Moody’s downgrade has
dampened sentiment‚” a local bond trader said.
At 12pm‚ the benchmark R157 bond was bid at 5.360% and
offered at 5.340% from 5.310% at Thursday’s close and 5.285% at Wednesday’s
close. The R207 was bid at 6.385% and offered at 6.355% from its previous close
of 6.320%‚ and the R186 was trading at 7.340% from 7.320% at its previous
The rand was bid at R8.2453 from its previous close of
Moody's Investors Service on Thursday evening downgraded
SA's government bond rating by one notch to Baa1 from A3‚ bringing it in line
with the Fitch‚ as well as Standard and Poor’s ratings. Moody’s kept the rating
outlook as negative.
Last week the I2038 received bids worth R345m‚ while this
week bids amounted to R610m. Treasury allotted R465m at a clearing yield of
1.930% compared with R225m at 1.970% last week.
Last week the I2025 received bids worth R510m‚ while this
week bids amounted to R475m. Treasury allotted R135m at a clearing yield of
1.310% compared with R500m at 1.440% last week.
Last week the I2050 received bids worth R180m‚ while this
week bids amounted to R200m. Treasury allotted R200m at a clearing yield of
1.980% compared with R225m at 1.980% last week.
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