Johannesburg – South African bonds were slightly firmer in midday trade on Tuesday, after a 'reasonable auction'.
By 11:50 the benchmark R157 bond was bid at 7.205 from 7.225% at its close on Monday. The benchmark R207 was bid at 7.945% from 7.920%, while the R186 was bid at 7.990% from 8.025%.
The rand was bid at R7.38 to the dollar from R7.33 at its previous close.
"The auction went reasonably well, there aren't stellar stats on the R214s, but there was some demand. We'll keep an eye on the currency for the remainder of the day, but bonds have rallied too hard and too far this past week so they will probably drift weaker," said a local trader.
At its weekly auction on Tuesday, the National Treasury received bids totalling R2.41bn for R1.1bn worth of R208 bonds and
bids totalling R1.99bn for one billion rand worth of R214 bonds
Tuesday sees the release of July trade data by SARS at 14:00.
South Africa's foreign trade balance with its non-Southern African Customs Union (SACU) trading partners is expected to have reached an 800 million rand deficit in July from the surprise R5.63bn surplus of June, according to a survey by I-Net Bridge.
A record R17.4bn deficit was set in January last year, but a few surprise surpluses have been registered since then as export performance began to improve, while the recession crimped back on imports. But July is not expected to be one of those months, with analysts believing the trade balance will come back to equilibrium in July.
Forecasts among the leading economists surveyed varied from a R1.4bn deficit to a R2.2bn surplus.
Earlier in the day the South African Reserve Bank (SARB) released credit extension to the private sector (PSCE) and M3 money supply data.
Credit extension to the private sector (PSCE) grew at a rate of 1.98% year-on-year (y/y) in July from a revised 0.89% (0.92%) y/y in June, the SARB said on Tuesday.
The rate of growth of South Africa's broad M3 money supply measure rose by 3.71% in the year to end July from 2.40% (2.41%) in the year to end June.
The rate of growth in South African credit extension to the private sector (PSCE) was expected at 1.5% y/y, while M3 money supply aggregate growth was expected at 2.5% y/y.
Forecasts among the seven leading economists surveyed for PSCE ranged from 1.2% to 1.9%, while the range of forecasts for M3 was from 1.9% to 2.8% at the top of the range.
Foreigners were net sellers of R16.566m of South African bonds including repo transactions on Monday after net sales of R63.605m of local bonds on Friday, Bond Exchange of South Africa statistics show.
Nominal cumulative volume was R10.985bn on Monday from R15.664bn on Friday.
Foreigners were net sellers of R122.929m of South African bonds excluding repo transactions on Monday after net sales of R48.685m
of local bonds on Friday.
In the year to date foreigners have been net buyers of R66.744bn worth of local bonds, excluding repo transactions.
So far for total transactions, including repo transactions, foreigners have been net buyers of R60.147bn 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.