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The National Treasury allotted R800m worth of R2023 bonds at a clearing yield of 7.220%‚ R800m worth of R213 bonds at a clearing yield of 7.920% and R500m worth of R2048 bonds at a clearing yield of 8.310% at 11.00am. The respective bids amounted to R3.105bn‚ R2.04bn and R995m.
“We saw good demand at the auction‚ so that has helped steady the market‚ but investor concerns about rising food and oil prices remain. Those concerns were not helped by the UK inflation data this morning‚” a local trader said.
At 11.43am‚ the benchmark R157 bond was trading at 5.680% from Monday’s close of 5.660% and Friday’s close of 5.620%‚ the R207 was bid at 6.680% and offered at 6.670% from its previous close of 6.635% and the R186 was trading at 7.470% from its previous close of 7.440%.
Barclays Capital said UK consumer inflation rose to 2.6% year-on-year (y/y) in July compared with the consensus forecast of a slowing to 2.3% y/y from 2.4% y/y in June.
“This was driven by an unseasonably
small 2.6% month-to-month (m/m) decline in clothing and footwear
prices and a 21.7% m/m increase in airfares. Compared to our
forecasts‚ clothing and footwear and airfares were the major source
of upside news. We had expected the early discounting seen in June‚
which saw an unexpectedly sharp drop in clothing prices‚ to be
maintained in July‚ as retailers responded to the depressed state
of consumer demand."
"In the event‚ it appears that we saw a repeat of the 2011 outcome‚ when much of the downside news in June was unwound in July‚ and it may be that we are simply seeing a change in the pattern of seasonal discounting with more promotional activity shifted to June rather than July. On airfares the ONS said that the main driver was short-haul flights to European destinations‚ suggesting that there may have been a surge in last-minute demand for short breaks as consumers sought to avoid expected Olympics-related disruption at home‚” Barclays said.
Foreigners were net sellers of R827.382m of South African bonds including repo transactions on Monday after net purchases of R3.248bn of local bonds on Friday‚ data released by the JSE show.
Nominal cumulative volume was R88.472bn on Monday from R41.225bn on Friday.
Foreigners were net sellers of R1.073bn of local bonds excluding repo transactions on Monday after net sales of R391.622m of local bonds on Friday.
For the year to date foreigners have been net buyers of R65.265bn 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 R66.912bn of local bonds including repo transactions. In 2011 they bought R37.501bn worth of local bonds.
