Johannesburg - South African bonds were up to 10 basis
points firmer in early trade on Tuesday, mainly on the back of the strong local
currency.
The National Treasury will auction R1.0bn worth of R203
bonds and R1.1bn worth of R207 bonds at 11:00.
By 09:06, the benchmark R157 bond was trading at 7.560% from
its previous close of 7.580%. The R207 was bid at 8.330% and offered at 8.300%
from 8.340% and the R186 was bid at 8.415% and offered at 8.485% from 8.520%.
The rand was bid at R7.0003 to the dollar from its previous
close of R7.0040.
"The market hasn't traded that much. We're a couple
points lower, mainly on the rand. We have the auction later. The R203s have
been relatively well-bid in the secondary market so I think they'll do very
well. The R207s haven't really seen that much demand. We expect the market to
drift lower towards the end of the day," said a local trader.
Standard Bank analysts said in a morning report that foreign
portfolio involvement in South African debt had seemingly entered a lull, which
had set a weaker tone for South African rates more generally.
"However, this evening's Monetary Policy Review could
create some interest for the rest of the week," the analysts added.
Foreigners were net sellers of R285.082m of South African
bonds including repo transactions on Monday after net purchases of R52.896m of
local bonds on Friday, Bond Exchange of South Africa statistics show.
Nominal cumulative volume was R166.289bn on Monday from
R59.894bn on Friday.
Foreigners were net sellers of R470.009m of South African
bonds excluding repo transactions on Monday after net purchases of R53.266m of
local bonds on Friday.
For the year to date, foreigners have been net buyers of R19.817bn 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 R11.692bn of local bonds. In
2010 they bought net R44.541bn worth of bonds.