Johannesburg – South African bonds were softer in midday trade on Thursday after the switch auction at 10:00.
The National Treasury was looking to switch R2.5bn worth of R201 bonds into either R186 bonds or R213 bonds.
It received bids worth R4.86bn on the R186 bond and R170m on the R213 bond‚ so it switched R2.2bn worth of R201 bonds into R186 bonds‚ but nothing into the R213 bond. Last week‚ the Treasury switched R1.035bn into R186 bonds and R1.85bn into R213 bonds.
In addition‚ traders said they were keeping an eye on the European Central Bank (ECB) meeting later in the day.
“The switch auction was not great‚ while there was still an overhang of supply from Tuesday‚ so we just moved softer. Now we wait for the ECB meeting announcements‚” a local bond trader said.
At 11:52‚ the benchmark R157 bond was trading at 5.430% from 5.395% at Wednesday’s close. The R207 was bid at 6.470% and offered at 6.445% from Wednesday’s close of 6.440%‚ and the R186 was trading at 7.335% from 7.325% previously.
The rand was bid at R8.3678 per dollar from Wednesday’s close of R8.3919.
The ECB will announce interest rates at 13:45 SA time‚ while the bond-buying programme and all the other information will be announced at the news conference at 14:30.
Foreigners bought a net R1.212bn of South African bonds including repo transactions on Wednesday after net purchases of R753.616m of local bonds on Tuesday‚ data released by the JSE show.
Nominal cumulative volume was R48.237bn on Wednesday from R191.399bn on Tuesday.
Foreigners were net buyers of R1.264bn of local bonds excluding repo transactions on Wednesday after net purchases of R751.256m of local bonds on Tuesday.
For the year to date foreigners have been net buyers of R71.563bn 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 R71.347bn of local bonds including repo transactions. In 2011 they bought R37.501bn worth of local bonds.