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Bonds slightly weaker, eye rand

Sep 02 2010 09:33 I-Net Bridge

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Johannesburg - South African bonds were a tad weaker in thin early trade on Thursday, nervously eyeing the rand to see if the
currency will break the R7.28 level.

By 08:50 the benchmark R157 bond was bid at 7.210 from 7.200% at its close on Wednesday. The benchmark R207 was bid at 7.910% from 7.880%, while the R186 was bid at 7.980% from 7.970%.

The rand was bid at R7.2832 to the dollar from R7.2815 at its previous close.

"Trade is pretty thin at the moment, bonds are marginally weaker as they nervously look on to the rand to see if it will break the crucial R7.28 level," said a local trader.

The only local data releases due today are August new vehicle sales by Naamsa and July electricity generated stats by Stats SA, which are not usually market moving.

Absa Capital said it would look for a small deceleration in headline sales growth for news vehicle sales, after the 20% y/y growth posted in July.

"This, in our view, is likely to continue to be driven through fading base effects from last year's improved sales performance in the second half of the year, while momentum growth in sales is also likely to slow owing to a "normalisation" in sales following the soccer World Cup for which many rental companies boosted their fleets," said the analysts.   

Foreigners were net buyers of R1.281bn of South African bonds including repo transactions on Wednesday after net purchases of R1.686bn of local bonds on Tuesday, Bond Exchange of South Africa statistics show.

Nominal cumulative volume was R21.270bn on Wednesday from R41.605bn on Tuesday.

Foreigners were net buyers of R1.513bn of South African bonds excluding repo transactions on Wednesday after net purchases of R2.364m of local bonds on Tuesday.

In the year to date foreigners have been net buyers of R70.621bn worth of local bonds, excluding repo transactions.

So far for total transactions, including repo transactions, foreigners have been net buyers of R63.114bn worth of bonds.

In 2009 foreigners were net buyers of R27.755bn worth of local bonds, excluding repo transactions, while for total transactions, including repo transactions, foreigners were net sellers of R2.424bn worth of bonds.

 
 
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