Johannesburg – South African bonds were a touch firmer in
quiet early trade on Tuesday‚ ahead of the weekly bond auction at 11am.
The National Treasury is offering R800m in R2023 bonds‚
R800m in R209 bonds and R500m in R2048 bonds.
“The (weaker) leading indicator puts renewed pressure on the
South African Reserve Bank (Sarb) to cut interest rates‚ so bonds are firmer
this morning‚” a local trader said.
At 9.22am‚ the benchmark R157 bond was trading at 5.570%
from 5.610% at Monday’s close and 5.690% at Friday’s close. The R207 was bid at
6.660% and offered at 6.645% from its previous close of 6.695%‚ and the R186
was bid at 7.565% and offered at 7.545% from its previous close of 7.590%.
The rand was bid at R8.2754 per dollar from R8.3197 at
SA's composite leading business economic indicator decreased
by 1.1% month on month (m/m)‚ Sarb said on Tuesday.
Seven of the 10 component time series that were available
for June 2012 decreased‚ while three increased.
The largest negative contributions in June came from a
decline in the export commodity price index‚ as well as a decline in the number
of residential building plans passed.
The major positive contributions in June came from an
improvement in the average hours worked in the manufacturing sector‚ followed
by an improvement in the volume of orders in the manufacturing sector.
The composite coincident business cycle indicator increased
by 0.7% m/m in May 2012.
The composite lagging business cycle indicator remained
unchanged on a monthly basis in May 2012.
On a year-on-year (y/y) basis the leading indicator dropped
for the sixth consecutive month‚ falling 4.3% y/y in June after a 1.7% y/y
decline in May and a 1.8% y/y decrease in April.
In July 2012‚ the Sarb cut the repo rate by 50 basis points
to 5.0% after keeping it steady since November 2010‚ partly in response to the
slowing growth momentum.
Foreigners were net buyers of R1.115bn of South African
bonds including repo transactions on Monday after net sales of R2.332bn of
local bonds on Friday‚ data released by the JSE show.
Nominal cumulative volume was R57.354bn on Monday from
R48.893bn on Friday.
Foreigners were net buyers of R1.137bn of local bonds
excluding repo transactions on Monday after net sales of R2.117bn of local
bonds on Friday.
For the year to date foreigners have been net buyers of
R64.249bn 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
R63.333bn of local bonds including repo transactions. In 2011 they bought
R37.501bn worth of local bonds.
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