Johannesburg – South African bonds eased in afternoon trade on Monday as the euro weakened as the euphoria on the Greek election result was replaced by renewed concerns about other eurozone countries.
“We had a good start on the Greek election result‚ but in the cold light of day it became increasingly evident that the eurozone problems have not been solved‚ so the euro weakened from $1.2728 to $1.2578. That prompted a sell-off in the rand and bonds just followed. In addition we have a fair bit of supply coming onto the market‚ so that is weighing on sentiment as well‚” a local trader said.
At 16:00‚ the benchmark R157 bond was trading at 6.140% from a best level of 6.065% in early trade and Friday’s close of 6.090%. The R207 was bid at 7.455% and offered at 7.435% from a previous close of 7.400% and the R186 was trading at 8.175% from its previous close of 8.110%.
The rand was bid at R8.3508 against the dollar from a best level of R8.2397 in early trade and R8.3653 at 16:02 on Friday.
Dow Jones Newswires reported that Germany was awaiting the troika's report on Greece's reform progress before it would take any action regarding pending bailout payments to Greece‚ a government spokesman said on Monday in Berlin.
"For now‚ the Greeks will form a government‚ then the troika will go to Greece and will come back with a report‚" the spokesman said. "And we will have to wait for all of this to happen first."
The troika of official lenders -the European Commission‚ the International Monetary Fund and the European Central Bank - are to return to Athens in the coming days to assess the current status of reforms and spending cuts in Greece.
The German government reiterated that no date for a second payout of €31.3bn from the temporary European bailout fund‚ the European Financial Stability Facility‚ or EFSF‚ will be announced until a new troika report is released.
A troika review must take place every three months for Greece to receive the next tranche of its €130bn bailout package.
Germany said the results of Sunday's vote were good news for Europe and should clear the way for an administration that would carry the support of the electorate to bring Greece back to a path of sustainable growth with the help of the European bailout mechanism.
Foreigners were net buyers of R5.655m of South African bonds including repo transactions on Friday after net purchases of R1.438bn of local bonds including repo transactions on Thursday‚ data released by the JSE shows.
Nominal cumulative volume was R77.078bn on Friday from R85.878bn on Thursday.
Foreigners were net sellers of R229.213m of South African bonds excluding repo transactions on Friday after net purchases of R1.216bn of local bonds on Thursday.
For the year to date foreigners have been net buyers of R38.883bn 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 R34.726bn of local bonds including repo transactions. In 2011 they bought R37.501bn worth of local bonds.