Bonds steady as foreigners hold off

Johannesburg – South African bonds were steady by the late afternoon on Thursday as tentative global risk appetite curbed demand for higher yielding emerging market assets.

By 16:04 the benchmark R157 bond was at 7.185%, from its close on Wednesday of 7.160%, while the R207 was at 7.940% from 7.950% at its previous close. The R186 was bid at 8.085% after closing at 8.050%.  

The rand was bid at 6.8811 to the dollar from its previous close of 6.9325.
 
Nedbank Capital says SA bond prices were steady in the absence of any major local economic data releases, while tentative global risk appetite had curbed demand for higher yielding emerging market assets.

"Trading activity is expected to be range bound until the release of Finance Minister Gordhan's Medium-Term Budget Policy Statement next week," said the analysts.

A bond dealer said activity had been quiet on the day, with the longer end firmer after some institutional buying.

Foreigners were net sellers of R1.269bn of South African bonds including repo transactions on Wednesday after net purchases of R1.729bn of local bonds on Tuesday, Bond Exchange of South Africa statistics show.  

Nominal cumulative volume was R69.655bn on Wednesday from R180.412bn on Tuesday.

Foreigners were net sellers of R1.249bn of South African bonds excluding repo transactions on Wednesday after net purchases of R1.367bn of local bonds on Tuesday.

In the year to date foreigners have been net buyers of R72.102bn worth of local bonds, excluding repo transactions.

So far for total transactions, including repo transactions, foreigners have been net buyers of R63.541bn rand 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 R3.3bn worth of bonds.