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Johannesburg - South African bonds were firmer in early trade on Thursday, as the stronger rand rubbed off on the market.
By 08:50, the benchmark R157 bond was trading at 7.770% from its previous close of 7.790%, while the R207 was bid at 8.530% from its previous close of 8.535%. The R186 was bid at 8.780% from its previous close of 8.790%.
The rand was bid at R6.7809 to the dollar from its previous close of R6.7980.
"It's still pretty quiet, but the rand has rubbed off a bit. There's not a lot going on, the market still seems to be finding its feet after the poor auction on Tuesday," said a local trader.
Standard Bank analysts also noted in their morning report that the market was still working through Tuesday's auction overhang.
"Price action suggests that long-end paper issued earlier this week is still finding a more permanent home than with banks' trading desks. But with energy having come off in the interim and US long rates at lower levels, the next 10-15 basis points move for SA rates could yet prove to be to the downside," the analysts said.
However, they added that, from a slightly longer-term perspective, they would view an extension of the past couple of week's bond rally as offering better opportunity to re-establish short/steeper positions.
In the absence of local market moving data, traders will keep an eye on their global counterparts for direction.
Foreigners were net buyers of R832.539m of South African bonds including repo transactions on Wednesday after net purchases of R2.064bn of local bonds on Tuesday, Bond Exchange of South Africa statistics show.
Nominal cumulative volume was R47.622bn on Wednesday from R136.034bn on Tuesday.
Foreigners were net buyers of R828.826m of South African bonds excluding repo transactions on Wednesday after net purchases of R968.584m of local bonds on Tuesday.
For the year to date, foreigners have been net buyers of R508m worth of local bonds, excluding repo transactions. In 2010 foreigners bought net R57.064bn worth of local bonds, excluding repo transactions.
For the year to date for total transactions, including repo transactions, foreigners have been net sellers of R4.559bn of local bonds. In 2010 they bought net R44.541bn worth of bonds.
By 08:50, the benchmark R157 bond was trading at 7.770% from its previous close of 7.790%, while the R207 was bid at 8.530% from its previous close of 8.535%. The R186 was bid at 8.780% from its previous close of 8.790%.
The rand was bid at R6.7809 to the dollar from its previous close of R6.7980.
"It's still pretty quiet, but the rand has rubbed off a bit. There's not a lot going on, the market still seems to be finding its feet after the poor auction on Tuesday," said a local trader.
Standard Bank analysts also noted in their morning report that the market was still working through Tuesday's auction overhang.
"Price action suggests that long-end paper issued earlier this week is still finding a more permanent home than with banks' trading desks. But with energy having come off in the interim and US long rates at lower levels, the next 10-15 basis points move for SA rates could yet prove to be to the downside," the analysts said.
However, they added that, from a slightly longer-term perspective, they would view an extension of the past couple of week's bond rally as offering better opportunity to re-establish short/steeper positions.
In the absence of local market moving data, traders will keep an eye on their global counterparts for direction.
Foreigners were net buyers of R832.539m of South African bonds including repo transactions on Wednesday after net purchases of R2.064bn of local bonds on Tuesday, Bond Exchange of South Africa statistics show.
Nominal cumulative volume was R47.622bn on Wednesday from R136.034bn on Tuesday.
Foreigners were net buyers of R828.826m of South African bonds excluding repo transactions on Wednesday after net purchases of R968.584m of local bonds on Tuesday.
For the year to date, foreigners have been net buyers of R508m worth of local bonds, excluding repo transactions. In 2010 foreigners bought net R57.064bn worth of local bonds, excluding repo transactions.
For the year to date for total transactions, including repo transactions, foreigners have been net sellers of R4.559bn of local bonds. In 2010 they bought net R44.541bn worth of bonds.
