Bonds weaken on risk aversion

Johannesburg - South African bonds were weaker in midday trade on Thursday, as risk aversion emanating from Greece's debt woes weighed on the market.

Dow Jones Newswires said that several officials familiar with the negotiations for debt-ridden Greece said that some of its eurozone creditors were considering delaying its full bailout package until after the country holds elections - which are expected to take place in April.

At the same time, arrangements would be made to help the country avoid disorderly default, Dow Jones Newswires added.

Meanwhile, Eurogroup President Jean-Claude Juncker said he was confident that Greece would get its next tranche of aid by Monday, on schedule.

At 11:50, the benchmark R157 bond was trading at 6.670%, from its previous close of 6.600%. The R207 was bid at 7.785% and offered at 7.755% from a previous close of 7.720% and the R186 was trading at 8.310% from its close of 8.250%.

The rand was bid at 7.8348 against the dollar from its previous close of 7.7619.

"It's the same old story - risk aversion on the back of Greece - the rand's not looking good," a trader said.

Foreigners were net sellers of R298.876 million of South African bonds including repo transactions on Wednesday after net purchases of R1.130 billion of local bonds on Tuesday, data released by the JSE shows.

Nominal cumulative volume was R66.660bn on Wednesday from R214.444bn on Tuesday.

Foreigners were net sellers of R313.483m of South African bonds excluding repo transactions on Wednesday after net purchases of R1.881bn of local bonds on Tuesday.

For the year to date foreigners have been net buyers of R11.516bn 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 R9.956bn of local bonds including repo transactions. In 2011 they bought R37.501bn of local bonds.