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Johannesburg - South African bonds weakened further on Friday morning after the
Reserve Bank kept the repo rate steady at 6.5% after its two-day Monetary
Policy Committee meeting.
By 08:50
the benchmark R157 bond was yielding 7.710% after closing at 7.655% on Thursday and the
10-year R207 was bid at 8.550% from 8.500% previously. The long-term R186
was bid at 8.825% from 8.785% at its previous close.
The rand
was bid at R7.4210 to the dollar from R7.4347 at its previous close.
A local
trader said that yields had run hard in the run up to the interest rate
decision in anticipation of a rate cut. However, they started weakening on
Thursday afternoon after the announcement that rates would be kept on hold.
That trend had continued this morning.
The trader
noted that the curve had flattened, led by the R186s which were trading at a
118 point spread before the announcement, moving to a spread of 112
points now.
The trader
added that the market would now watch the inflation linked government bond
auction later in the morning, when R600m will be offered in R212,
R210 and R202s.
Foreigners were net buyers of R51.918m of South African bonds
including repo transactions on Thursday, after net purchases of R10.121m of local bonds on Wednesday, Bond Exchange of South Africa statistics
show.
Nominal
cumulative volume was R71.294bn on Thursday from R65.473bn
on Wednesday.
Foreigners
were net sellers of R57.093m of South African bonds excluding repo
transactions on Thursday, after net sales of R27.895m of local bonds
on Wednesday.
In the year to date foreigners have
been net buyers of R51.008bn worth of local
bonds, excluding repo transactions.
So
far for total transactions, including repo transactions, foreigners have been net buyers
of R50.587bn 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.
- I-Net Bridge