Johannesburg – South African bonds were firm in afternoon trade on Tuesday as investors moved back to “risk-on” trades that benefited emerging market bonds and currencies.
“Overseas investors have moved back to risk-on trading strategies‚ so we have gained with the R157 back at a record low yield as the front end remain well bid‚” a local trader said.
At 15:40‚ the benchmark R157 bond was trading at 6.045% from Monday’s close of 6.100%. The R207 was trading at 7.285% from a previous close of 7.410% and the R186 was trading at 8.000% from its previous close of 8.130%.
The rand was bid at R8.2279 against the dollar from R8.2752 at noon on Tuesday and Monday’s close of R8.2976.
Dow Jones Newswires reported that US home building slowed in May amid a pull back in multifamily construction‚ but new permits granted reached their highest level since 2008‚ suggesting future demand for new houses.
Foreigners were net buyers of R1.733bn of South African bonds including repo transactions on Monday after net purchases of R5.655m of local bonds on Friday‚ data released by the JSE shows.
Nominal cumulative volume was R66.910bn on Monday from R77.078bn on Friday.
Foreigners were net buyers of R1.582bn of South African bonds excluding repo transactions on Monday after net sales of R229.213m of local bonds on Friday.
For the year to date foreigners have been net buyers of R40.465bn 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 R36.459bn of local bonds including repo transactions. In 2011 they bought R37.501bn worth of local bonds.