Johannesburg- South African bonds were a few points firmer in midday trade on Tuesday, after a "reasonable" auction.
At its first auction for the year, the National Treasury received bids totalling R2.37 billion for R1.1 billion worth of R204 bonds at a clearing yield of 7.880% and bids totalling R3.79 billion for R1 billion worth of R213 bonds at a clearing yield of 9.050%.
By 11:50, the benchmark R157 bond was trading at 6.840%, from its previous close of 6.885%. The R207 was bid at 8.065% and offered at 8.040% from a previous close of 8.095% and the R186 was bid at 8.640% and offered at 8.615% from its close of 8.670%.
The rand was bid at 8.1291 against the dollar from its previous close of 8.1601.
"The auction was fair, not marvellous. We expected it to go better. I think with an announcement regarding the remaining R20 billion R189s that need to be switched back this fiscal year and the budget speech around the corner, guys are a little pensive about piling into bonds at these levels.
"We saw no demand from local funds, it seems as though they have a wait-and-see attitude," a senior bond expert said.
Meanwhile, in a statement, the National Treasury said SA had priced a US$1.5 billion 12 year global bond on the international capital markets yesterday.
The bond was priced at a coupon (interest) of 4.665% which represented a spread of 270 basis points above the 10 year US Treasury's benchmark bonds, Treasury added in a statement.
The pool was made up of a diversity of investors from across the globe with the majority coming from Europe and the US, with the transaction attracting bids to the value of $3 billion, a bid to cover ratio of 2x the issue amount.
"The success of the transaction reflects investor confidence in SA as a credit amid concerns about economic developments out of Europe.
"The government also sees the success of the transaction as an expression of confidence in the country's stable political environment, sound macro economic policy framework and prudent fiscal management," the statement added.
Absa Capital said in a morning report that with the 2011/2012 offshore borrowing plan set to zero in October's MTBPS, yesterday's issue looked to be a pre-finance of the R7.66 billion in gross offshore issuance for FY12/13 as set out in the medium-term budget.
"SA has a $1bn external issue maturing on 24 April of this year. In early 2011 the treasury issued $750m of a 2041 bond," Absa Capital said.
Meanwhile, Standard Bank said this was already the fifth emerging market sovereign issue of this year, following the lead of countries such as Mexico, Brazil, the Philippines and Indonesia.
"The very low yields in the US currently was likely a key factor in the treasury's decision to issue, with the proceeds intended to repay maturing debt and finance other government activities," the analysts said.
Foreigners were net sellers of R132.258 million of South African bonds including repo transactions on Monday after net sales of R1.431 billion of local bonds on Friday, data released by the JSE shows.
Nominal cumulative volume was R37.783 billion on Monday from R40.470 billion on Friday.
Foreigners were net sellers of R132.524 million of South African bonds excluding repo transactions on Monday after net sales of R1.018 billion of local bonds on Friday.
For the year to date foreigners have been net sellers of R739.5 million of local bonds, excluding repo transactions.
In 2011 foreigners were net buyers of R47.359 billion worth of local bonds, excluding repo transactions.
In the year to date foreigners have been net sellers of R1.154 billion of local bonds including repo transactions.
In 2011 they bought R37.501 billion of local bonds.
At its first auction for the year, the National Treasury received bids totalling R2.37 billion for R1.1 billion worth of R204 bonds at a clearing yield of 7.880% and bids totalling R3.79 billion for R1 billion worth of R213 bonds at a clearing yield of 9.050%.
By 11:50, the benchmark R157 bond was trading at 6.840%, from its previous close of 6.885%. The R207 was bid at 8.065% and offered at 8.040% from a previous close of 8.095% and the R186 was bid at 8.640% and offered at 8.615% from its close of 8.670%.
The rand was bid at 8.1291 against the dollar from its previous close of 8.1601.
"The auction was fair, not marvellous. We expected it to go better. I think with an announcement regarding the remaining R20 billion R189s that need to be switched back this fiscal year and the budget speech around the corner, guys are a little pensive about piling into bonds at these levels.
"We saw no demand from local funds, it seems as though they have a wait-and-see attitude," a senior bond expert said.
Meanwhile, in a statement, the National Treasury said SA had priced a US$1.5 billion 12 year global bond on the international capital markets yesterday.
The bond was priced at a coupon (interest) of 4.665% which represented a spread of 270 basis points above the 10 year US Treasury's benchmark bonds, Treasury added in a statement.
The pool was made up of a diversity of investors from across the globe with the majority coming from Europe and the US, with the transaction attracting bids to the value of $3 billion, a bid to cover ratio of 2x the issue amount.
"The success of the transaction reflects investor confidence in SA as a credit amid concerns about economic developments out of Europe.
"The government also sees the success of the transaction as an expression of confidence in the country's stable political environment, sound macro economic policy framework and prudent fiscal management," the statement added.
Absa Capital said in a morning report that with the 2011/2012 offshore borrowing plan set to zero in October's MTBPS, yesterday's issue looked to be a pre-finance of the R7.66 billion in gross offshore issuance for FY12/13 as set out in the medium-term budget.
"SA has a $1bn external issue maturing on 24 April of this year. In early 2011 the treasury issued $750m of a 2041 bond," Absa Capital said.
Meanwhile, Standard Bank said this was already the fifth emerging market sovereign issue of this year, following the lead of countries such as Mexico, Brazil, the Philippines and Indonesia.
"The very low yields in the US currently was likely a key factor in the treasury's decision to issue, with the proceeds intended to repay maturing debt and finance other government activities," the analysts said.
Foreigners were net sellers of R132.258 million of South African bonds including repo transactions on Monday after net sales of R1.431 billion of local bonds on Friday, data released by the JSE shows.
Nominal cumulative volume was R37.783 billion on Monday from R40.470 billion on Friday.
Foreigners were net sellers of R132.524 million of South African bonds excluding repo transactions on Monday after net sales of R1.018 billion of local bonds on Friday.
For the year to date foreigners have been net sellers of R739.5 million of local bonds, excluding repo transactions.
In 2011 foreigners were net buyers of R47.359 billion worth of local bonds, excluding repo transactions.
In the year to date foreigners have been net sellers of R1.154 billion of local bonds including repo transactions.
In 2011 they bought R37.501 billion of local bonds.