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Bonds firmer on rand in quiet session

Johannesburg - South African bonds were a bit firmer in midday play on Monday, in line with the rand.

At 11:50, the benchmark R157 bond was trading at 6.365%, from Friday's close of 6.375%. The R207 was bid at 7.570% and offered at 7.550% from a previous close of 7.560% and the R186 was trading at 8.275% from its close of 8.285%.

The rand was bid at 8.3018 against the dollar from Friday's close of 8.3197.

"It is very, very quiet - we're just tracking the rand here," a local trader said.

Attention turns towards consumer inflation (CPI) data and a statement from the South African Reserve Bank's (Sarb) Monetary Policy Committee (MPC) due later this week.

The repo rate is expected to remain unchanged when the Monetary Policy Committee (MPC) makes its rates announcement on Thursday, May 24, according to a survey of ten leading economists by I-Net Bridge.

Of the ten economists surveyed, none foresaw a rate cut on the cards. The interest rate was cut by 50 basis points to 5.5% in November 2010.

This was the lowest reading in almost 30 years and resulted in a real interest rate of about 1%.

The South African Reserve Bank (Sarb) left the rate unchanged at every MPC meeting in 2011, as well as in January and March this year.

Inflation, which the Sarb monitors closely in its rates decisions, was 6% year on year (y/y) in March.

Foreigners were net buyers of R685.119m of South African bonds including repo transactions on Friday after net purchases of R1.609bn of local bonds on Thursday, data released by the JSE shows.

Nominal cumulative volume was R55.158bn on Friday from R57.358bn on Thursday.

Foreigners were net buyers of R683.462m of South African bonds excluding repo transactions on Friday after net purchases of R1.609bn of local bonds on Thursday.

For the year to date foreigners have been net buyers of R38.517bn 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 R34.545bn of local bonds including repo transactions. In 2011 they bought R37.501bn of local bonds.
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