Bonds firm on rand, eurozone sentiment

Johannesburg - South African bonds remained in firmer territory during quiet midday trade on Monday, mainly on the back of the rand, some squaring off activity and positive sentiment out of Europe.

According to Dow Jones Newswires, the Greek parliament approved austerity measures to qualify for financial assistance from European Union countries and avoid a default.

"Although the austerity measures were widely backed on a 199-74 vote, Athens still must win approval from eurozone finance ministers meeting on Wednesday for its EUR130 billion bailout, and it hasn't sealed a deal with private creditors on the haircut they would take on their holdings of government bonds," it added.

At 11:50, the benchmark R157 bond was trading at 6.560%, from its previous close of 6.630%. The R207 was bid at 7.760% and offered at 7.730% from a previous close of 7.815% and the R186 was bid at 8.235% and offered at 8.205% from its close of 8.295%.

The rand was bid at 7.6592 against the dollar from its previous close of 7.7433.

"We're following the rand lower, there's better sentiment out of Europe and a bit of squaring up happening today. It's actually fairly quiet - we're just drifting around," a trader said.

Foreigners were net buyers of R2.417bn of South African bonds including repo transactions on Friday after net sales of R2.775bn of local bonds on Thursday, data released by the JSE shows.

Nominal cumulative volume was R44.617bn on Friday from R56.144bn on Thursday.

Foreigners were net buyers of R2.417bn of South African bonds excluding repo transactions on Friday after net sales of R2.776bn of local bonds on Thursday.

For the year to date foreigners have been net buyers of R8.903bn 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 R8.079bn of local bonds including repo transactions. In 2011 they bought R37.501bn of local bonds.