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Johannesburg - The long end of the bond market was firmer in midday trade on Wednesday‚ but dealers said trading volumes remained small as investors were nervous ahead of the release of US data.
“We are seeing some nibbling in the longer end and that was reflected in the Eskom auction‚ where the bid:allocation ratio was almost nine for the ES33.
"The main US data is the second revision of the first quarter GDP‚ which seldom changes much from the first revision‚ but given the mood in the US bond market‚ any sign of robust economic growth leads to a sell-off‚” a local bond trader said.
At 11:32 the benchmark R186 bond was trading at 8.180% after closing at 8.200% on Tuesday and 8.290% on Monday. The R157 was trading at 6.400% from 6.395% previously and the R207 was bid at 7.665% and offered at 7.645% from 7.640% at its previous close.
The rand was bid at R10.0712 to the dollar from R10.1002 at Tuesday’s close.
Eskom allocated R140m worth of the inflation-linked EL29 bond at a clearing yield of 2.37% after receiving bids worth R140m. It allocated only R25m worth of the longer-dated ES33 bond at a clearing yield of 9.45% after receiving bids worth R221m and R35m of the medium-dated ES26 at a clearing yield of 8.765% after receiving bids worth R110m.
The National Treasury said at 11:00 that it would auction R800m of R213 bonds‚ R800m of R214 bonds and R750m of R2048 bonds on July 2.
