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Johannesburg - South African bonds firmed in
midday trade on Thursday as this year's first switch auction saw the
National Treasury switch R2.9bn of the R206 bond into the
short-dated R157 bond, while only R90m was allotted to the longer
dated R186 bond and nothing was allotted to R204 bonds, which only
received five bids.
"The Treasury strategy seems to be boosting the longer end by allotting most of the switch auction to the short end. That is not sustainable as at some time Treasury will have to switch out of the R157 unless they want to have a redemption overload," a bond trader said.
At noon, the benchmark R157 bond was trading at 6.460% from Wednesday's close of 6.480% and Tuesday's close of 6.490%. The R207 was bid at 7.645% and offered at 7.640% from a previous close of 7.680% and the R186 was trading at 8.310% from its close of 8.350%.
The rand was bid at 8.3117 against the dollar from yesterday's close of 8.3155.
Foreigners were net sellers of R76.452m of South African bonds including repo transactions on Wednesday after net sales of R329.508m of local bonds on Tuesday, data released by the JSE shows.
Nominal cumulative volume was R233.157bn on Wednesday from R240.040bn on Tuesday.
Foreigners were net sellers of R77.801m of South African bonds including repo transactions on Wednesday after net sales of R492.744m of local bonds on Tuesday.
For the year to date foreigners have been net buyers of R36.224bn of local bonds, excluding repo transactions. In 2011 they were net buyers of R47.359bn worth of local bonds, excluding repo transactions.
In the year to date foreigners have been net buyers of R32.252bn of local bonds including repo transactions. In 2011 they bought R37.501bn of local bonds.
"The Treasury strategy seems to be boosting the longer end by allotting most of the switch auction to the short end. That is not sustainable as at some time Treasury will have to switch out of the R157 unless they want to have a redemption overload," a bond trader said.
At noon, the benchmark R157 bond was trading at 6.460% from Wednesday's close of 6.480% and Tuesday's close of 6.490%. The R207 was bid at 7.645% and offered at 7.640% from a previous close of 7.680% and the R186 was trading at 8.310% from its close of 8.350%.
The rand was bid at 8.3117 against the dollar from yesterday's close of 8.3155.
Foreigners were net sellers of R76.452m of South African bonds including repo transactions on Wednesday after net sales of R329.508m of local bonds on Tuesday, data released by the JSE shows.
Nominal cumulative volume was R233.157bn on Wednesday from R240.040bn on Tuesday.
Foreigners were net sellers of R77.801m of South African bonds including repo transactions on Wednesday after net sales of R492.744m of local bonds on Tuesday.
For the year to date foreigners have been net buyers of R36.224bn of local bonds, excluding repo transactions. In 2011 they were net buyers of R47.359bn worth of local bonds, excluding repo transactions.
In the year to date foreigners have been net buyers of R32.252bn of local bonds including repo transactions. In 2011 they bought R37.501bn of local bonds.
