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Johannesburg - South African bonds lost their
early momentum in late afternoon on Tuesday in line with the rand. A
strong local auction and cheery euro had seen to gains of up to eight
basis points earlier in the day, but sentiment shifted again in the
afternoon as the euro lost its earlier sheen.
Bonds were, however, on a weaker track in early trade as
investors looked to "cheapen up", and by the close the yield curve
varied from flat to three pips worth of gains.
By 16:12, the benchmark R157 bond was trading at 6.760%,
unchanged from its previous close. The R207 was at 7.970% from a
previous close of 8.000% and the R186 was at 8.520% from its close of
8.530%.
The rand was bid at 8.0438 against the dollar from its previous close of 8.0937.
The South African Treasury on Tuesday allotted R1.1 billion
worth of R207 bonds at a clearing yield of 7.945% and R1 billion worth
of R214 bonds at a clearing yield of 8.960%.
In late trade, a dealer pointed to a change in sentiment out
of Europe as a key factor. Solid German and Chinese economic data had
underpinned the euro earlier, according to Dow Jones Newswires, but the
sovereign debt crisis continued to weigh in later trade.
Local traders noted that risk appetite had improved during the morning session in line with European sentiment.
But the SA auction, which was the main event for the bond
market, according to a dealer, was well bid for this early in the year,
with the over billion rand in R207's getting covered by nearly four
times, which is healthy in a tight market.
Foreigners were net buyers of R60.057 million of South African
bonds including repo transactions on Monday after net purchases of
R416.300 million of local bonds on Friday, data released by the JSE
shows.
Nominal cumulative volume was R54.035 billion on Monday from R45.292 billion on Friday.
Foreigners were net buyers of R58.721 million of South African
bonds excluding repo transactions on Monday after net purchases of
R416.156 million of local bonds on Friday.
For the year to date foreigners have been net sellers of
R848.234 million of local bonds, excluding repo transactions.
In 2011 foreigners were net buyers of R47.359 billion worth of local bonds, excluding repo transactions.
In the year to date foreigners have been net sellers of R1.666 billion of local bonds including repo transactions.
In 2011 they bought R37.501 billion of local bonds.