Bonds firmer after well-bid auction

Johannesburg - South African bonds were up to eleven basis points firmer in late trade on Tuesday, on the back of a relatively well-bid weekly government auction.

By 15:30 the benchmark R157 bond was bid at 7.220% from 7.270% at its close on Monday. The benchmark R207 was bid at 7.885% and offered at 7.855% from 7.965%, while the R186 was bid at 7.925% and offered at 7.895% from 8.030%.

The rand was bid at R7.2286 to the dollar from R7.2195 at its previous close.

"Bonds are firmer as a result of the strong auction earlier in the day.

There was a lot of foreign demand," said a local trader.

Earlier in the day, another trader said: "There was demand for both stock. They cleared three points stronger than where they were before."

At its weekly auction on Tuesday, the National Treasury received bids totalling R4.91bn for R1.1bn worth of R203 bonds and bids totalling R3.82bn for R1bn worth of R207 bonds.

Foreigners were net sellers of R798.542m of South African bonds including repo transactions on Monday, after net purchases of R752.653m of local bonds on Friday, Bond Exchange of South Africa statistics show.

Nominal cumulative volume was R33.526bn on Monday from R39.395bn on Friday.

Foreigners were net sellers of R800.613m of South African bonds excluding repo transactions on Monday after net purchases of R769.782m of local bonds on Friday.

In the year to date foreigners have been net buyers of R71.075bn worth of local bonds, excluding repo transactions.

So far for total transactions, including repo transactions, foreigners have been net buyers of R63.603bn worth of bonds.

In 2009 foreigners were net buyers of R27.755bn worth of local bonds, excluding repo transactions, while for total transactions, including repo transactions, foreigners were net sellers of R2.424bn worth of bonds.