Johannesburg – South African bonds were softer in afternoon trade on Thursday on the back of a weaker rand.
“We are just moving softer on the back of an easier rand‚” a local trader said.
At 16:00‚ the benchmark R157 bond was trading at 6.020% after touching a record low of 5.940% in the morning from Wednesday’s close of 5.960% and Tuesday’s close of 6.040%. The R207 was bid at 7.250% and offered at 7.230% from a previous close of 7.190% and the R186 was trading at 8.030% from its previous close of 7.950%.
The rand was bid at R8.2689 against the dollar from Wednesday’s close of R8.1984.
Dow Jones Newswires reported that German Economics Minister Philipp Roesler said on Thursday he was relieved that current negotiations over Europe's permanent rescue fund and fiscal pact hadn't led to a pooling of eurozone debt.
"At today's talks‚ it was important for us to avoid a pooling of debt‚" Roesler said during a press conference.
Chancellor Angela Merkel's government and opposition parties have been negotiating for weeks to reach a compromise to allow the fiscal pact to be ratified by parliament. In return for their votes to ratify the pact‚ the opposition has demanded that the government back a European tax on financial transactions as well as measures to boost weak eurozone economies.
Roesler said he was glad the country's main opposition parties had signaled their willingness to ratify the pact before the official summer break on July 7.
The European fiscal pact‚ which was signed in March by all but two European Union countries‚ enforces budget discipline in the eurozone‚ punishes countries that fail to comply and gives EU institutions more oversight over member-state budgets.
The EU's permanent rescue fund‚ or European Stability Mechanism‚ is scheduled to replace the temporary European Financial Stability Facility next month‚ pending ratification by national parliaments.
Foreigners were net buyers of R757.743m of South African bonds including repo transactions on Wednesday after net purchases of R1.243bn of local bonds on Tuesday‚ data released by the JSE shows.
Nominal cumulative volume was R80.763bn on Wednesday from R237.879bn on Tuesday.
Foreigners were net buyers of R4.886m of South African bonds excluding repo transactions on Wednesday after net purchases of R2.109bn of local bonds on Tuesday.
For the year to date foreigners have been net buyers of R42.579bn 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 R38.460bn of local bonds including repo transactions. In 2011 they bought R37.501bn worth of local bonds.