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Bonds off best level after CPI

Johannesburg – South African bonds were off their best level in midday trade on Wednesday‚ after the release of consumer price index (CPI) data at 10:00.

CPI was expected to have eased further‚ to 5.4% year on year (y/y) in June from 5.7% y/y in May‚ according to a survey of leading economists by I-Net Bridge. Forecasts for CPI among the 10 economists ranged from 5.3% to 5.6%. The actual outcome was a 5.5% y/y rise.

“We saw some profit taking after the CPI release as I guess it was not as good as some people expected‚ but the move was marginal‚” a local trader said.

At 11:40‚ the benchmark R157 bond was trading at 5.710% from a best level of 5.670% this morning and 5.700% at Tuesday’s close. The R207 was bid at 6.685% and offered at 6.655% from a previous close of 6.650% and the R186 was trading at 7.440% from its previous close of 7.420%.

At the end of May the R157 closed at 6.390%‚ the R207 at 7.645% and the R186 at 8.375%.

The rand was bid at R8.1902 against the dollar from Tuesday’s close of R8.1646 and Monday’s close of R8.2027.

The National Treasury will auction R800m worth of R2023 bonds‚ R800m worth of R214 bonds and R500m worth of R2048 bonds on July 24.

Foreigners were net buyers of R673.002m of South African bonds including repo transactions on Tuesday after net purchases of R229.896m of local bonds on Monday‚ data released by the JSE show.

Nominal cumulative volume was R226.690bn on Tuesday from R70.674bn on Monday.

Foreigners were net buyers of R873.851m of South African bonds excluding repo transactions on Tuesday after net purchases of R830.452m of local bonds on Monday.

For the year to date foreigners have been net buyers of R59.333bn 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 R56.210bn of local bonds including repo transactions. In 2011 they bought R37.501bn worth of local bonds.

 
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