Johannesburg - The South African bond market was a touch firmer in quiet midday trade on Monday on a slightly stronger rand.
“The rand is slightly stronger‚ which is helping our bonds‚ but there is not much in it‚ as the GDP data on Tuesday and budget on Wednesday will determine the market’s direction‚” a local bond trader said.
At 11:40 the benchmark R186 was trading at 7.225% from 7.230% at Friday’s close. The R157 was bid at 5.275% and offered at 5.260% from 5.275% at its previous close‚ and the R207 was bid at 6.270% and offered at 6.245% from its previous close of 6.260%.
The rand was last bid at R8.8573/$ from R8.8871/$ at Friday’s close.
Dow Jones Newswires reported that Moody's Investors Service stripped the UK of its coveted triple-A rating late on Friday‚ while Italian government bonds rallied ahead of the results of the country's general elections.
In its report‚ Moody's specifically highlighted that economic recovery in the UK has proved to be very slow and weak growth could extend into the second half of this decade.
Although a possible downgrade had been well-flagged‚ the timing perplexed many investors; many thought the ratings agencies would wait until after the government's 2013 budget scheduled to take place on March 20.
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