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Johannesburg - South African bonds were up to 10 basis points firmer in late trade on Wednesday, thanks to a surge in interest in SA bonds from foreign investors.
Earlier, traders had noted that foreigners were driving local yield direction.
By 15:50, the benchmark R157 bond was trading at 6.745% from 6.835% at the previous close. The R207 was bid at 7.790% and offered at 7.775% from 7.855% and the R186 was trading at 8.010% from 8.165%
The rand was bid at 7.0771 against the dollar from its previous close of 7.1434.
The National Treasury will auction R1.1bn worth of R186 bonds and R1.0bn worth of R209 bonds at its weekly auction on August 23.
Figures released by Statistics SA showed that South African retail trade sales at constant (2008) prices for June recorded a 2.2% growth year on year (y/y) after a revised 0.2% (0.0%) growth in May.
Retail trade sales at constant (2008) prices for June were expected to increase to 2.7% y/y according to a survey of leading economists by I-Net Bridge.
Forecasts among the eight economists ranged from -1.0% to 3.5%.
Measured in real terms (constant 2008 prices), seasonally adjusted retail trade sales growth rose 2.0% in June compared with May, following month-on-month changes of -4.8% in May and 2.8% in April.
According to Efficient Group economist Freddie Mitchell, retail sales figures surprised slightly to the upside for the month of June 2011.
"This increase comes as real good news given the overall economic uncertainty across the globe and even in South Africa. It is still very difficult to forecast retail sales figures given the last two months of data, the lower growth prospects in general and new economic uncertainties.
"Retail sales seem to be blowing hot and cold the last two months, and therefore the credit demand and growth prospects in the South African economy should be studied with care. Consumer demand in the economy still appears to be on the fragile side as the Trade Activity Index (TAI) also declined further during July and is now below the positive mark of 50 points," the economist said.
He added that growth in retail remained a key driver to economic growth and at this stage the current uneven or fragile growth in retail sales was something the South African economy could do without.
Foreigners were net buyers of R2.185bn of South African bonds including repo transactions on Tuesday after net purchases of R1.013bn of local bonds on Monday, data released by the JSE shows.
Nominal cumulative volume was R36.360bn on Tuesday from R73.163bn on Monday.
Foreigners were net buyers of R2.180bn of South African bonds excluding repo transactions on Tuesday after net purchases of R1.009bn of local bonds on Monday.
For the year to date, foreigners have been net buyers of R49.537bn worth of local bonds, excluding repo transactions. In 2010 foreigners bought net R57.064bn worth of local bonds, excluding repo transactions.
For the year to date for total transactions, including repo transactions, foreigners have been net buyers of R40.684bn of local bonds. In 2010 they bought net R44.541bn worth of bonds.
Earlier, traders had noted that foreigners were driving local yield direction.
By 15:50, the benchmark R157 bond was trading at 6.745% from 6.835% at the previous close. The R207 was bid at 7.790% and offered at 7.775% from 7.855% and the R186 was trading at 8.010% from 8.165%
The rand was bid at 7.0771 against the dollar from its previous close of 7.1434.
The National Treasury will auction R1.1bn worth of R186 bonds and R1.0bn worth of R209 bonds at its weekly auction on August 23.
Figures released by Statistics SA showed that South African retail trade sales at constant (2008) prices for June recorded a 2.2% growth year on year (y/y) after a revised 0.2% (0.0%) growth in May.
Retail trade sales at constant (2008) prices for June were expected to increase to 2.7% y/y according to a survey of leading economists by I-Net Bridge.
Forecasts among the eight economists ranged from -1.0% to 3.5%.
Measured in real terms (constant 2008 prices), seasonally adjusted retail trade sales growth rose 2.0% in June compared with May, following month-on-month changes of -4.8% in May and 2.8% in April.
According to Efficient Group economist Freddie Mitchell, retail sales figures surprised slightly to the upside for the month of June 2011.
"This increase comes as real good news given the overall economic uncertainty across the globe and even in South Africa. It is still very difficult to forecast retail sales figures given the last two months of data, the lower growth prospects in general and new economic uncertainties.
"Retail sales seem to be blowing hot and cold the last two months, and therefore the credit demand and growth prospects in the South African economy should be studied with care. Consumer demand in the economy still appears to be on the fragile side as the Trade Activity Index (TAI) also declined further during July and is now below the positive mark of 50 points," the economist said.
He added that growth in retail remained a key driver to economic growth and at this stage the current uneven or fragile growth in retail sales was something the South African economy could do without.
Foreigners were net buyers of R2.185bn of South African bonds including repo transactions on Tuesday after net purchases of R1.013bn of local bonds on Monday, data released by the JSE shows.
Nominal cumulative volume was R36.360bn on Tuesday from R73.163bn on Monday.
Foreigners were net buyers of R2.180bn of South African bonds excluding repo transactions on Tuesday after net purchases of R1.009bn of local bonds on Monday.
For the year to date, foreigners have been net buyers of R49.537bn worth of local bonds, excluding repo transactions. In 2010 foreigners bought net R57.064bn worth of local bonds, excluding repo transactions.
For the year to date for total transactions, including repo transactions, foreigners have been net buyers of R40.684bn of local bonds. In 2010 they bought net R44.541bn worth of bonds.
