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Johannesburg - South African bonds maintained
their weaker bias in midday trade on Wednesday, driven primarily by the
rand.
But traders noted that buying of local bonds had provided a boost to the market and limited any "dramatic" weaker movements.
At 11:50, the benchmark R157 bond was trading at 6.530% from Tuesday's close of 6.490%. The R207 was bid at 7.750% and offered at 7.725% from a previous close of 7.690% and the R186 was trading at 8.440% from its close of 8.390%.
The rand was bid at 8.3604 against the dollar from yesterday's close of 8.3275.
"Where we are indicates to us what sort of resistance there is in the market. The economic outlook hasn't changed. In fact, it has probably deteriorated to some extent but we'll wait and see what [retail] sales say - although that's not a major barometer.
"I also think that on the way down a lot of the local funds have been underweight for some time in bonds and they are probably realising that the risk is lower rates rather than higher rates despite what Gill Marcus said recently," a trader said.
"I think into any weakness both local and foreign accounts have been better buyers. The only thing that will turn it around is if the rand breaks above 8.50 because at the moment it's still not in bad territory. If it breaks though, I don't think it's going to concern the bonds too much. So in the interim we'll get buying into the weakness," the trader added.
The National Treasury said it would auction R500m worth of R203 bonds, R500m worth of R208 bonds and R1.1bn worth of R214 bonds on May 22 at its weekly auction.
March retail trade sales will be released today at 13:00.
Growth in SA's retail trade sales at constant (2008) prices for March is expected to increase by 6.8% year on year (y/y), from a y/y growth of 7.2% in February, according to a survey of leading economists by I-Net Bridge. Forecasts among the ten economists ranged from 4.30% to 7.93%.
Foreigners were net sellers of R329.508m of South African bonds including repo transactions on Tuesday after net sales of R5.986m of local bonds on Monday, data released by the JSE shows.
Nominal cumulative volume was R240.040bn on Tuesday from R74.052bn on Monday.
Foreigners were net sellers of R492.744m of South African bonds including repo transactions on Tuesday after net purchases of R69.425m of local bonds on Monday.
For the year to date foreigners have been net buyers of R36.302bn 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 R32.328bn of local bonds including repo transactions. In 2011 they bought R37.501bn of local bonds.
But traders noted that buying of local bonds had provided a boost to the market and limited any "dramatic" weaker movements.
At 11:50, the benchmark R157 bond was trading at 6.530% from Tuesday's close of 6.490%. The R207 was bid at 7.750% and offered at 7.725% from a previous close of 7.690% and the R186 was trading at 8.440% from its close of 8.390%.
The rand was bid at 8.3604 against the dollar from yesterday's close of 8.3275.
"Where we are indicates to us what sort of resistance there is in the market. The economic outlook hasn't changed. In fact, it has probably deteriorated to some extent but we'll wait and see what [retail] sales say - although that's not a major barometer.
"I also think that on the way down a lot of the local funds have been underweight for some time in bonds and they are probably realising that the risk is lower rates rather than higher rates despite what Gill Marcus said recently," a trader said.
"I think into any weakness both local and foreign accounts have been better buyers. The only thing that will turn it around is if the rand breaks above 8.50 because at the moment it's still not in bad territory. If it breaks though, I don't think it's going to concern the bonds too much. So in the interim we'll get buying into the weakness," the trader added.
The National Treasury said it would auction R500m worth of R203 bonds, R500m worth of R208 bonds and R1.1bn worth of R214 bonds on May 22 at its weekly auction.
March retail trade sales will be released today at 13:00.
Growth in SA's retail trade sales at constant (2008) prices for March is expected to increase by 6.8% year on year (y/y), from a y/y growth of 7.2% in February, according to a survey of leading economists by I-Net Bridge. Forecasts among the ten economists ranged from 4.30% to 7.93%.
Foreigners were net sellers of R329.508m of South African bonds including repo transactions on Tuesday after net sales of R5.986m of local bonds on Monday, data released by the JSE shows.
Nominal cumulative volume was R240.040bn on Tuesday from R74.052bn on Monday.
Foreigners were net sellers of R492.744m of South African bonds including repo transactions on Tuesday after net purchases of R69.425m of local bonds on Monday.
For the year to date foreigners have been net buyers of R36.302bn 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 R32.328bn of local bonds including repo transactions. In 2011 they bought R37.501bn of local bonds.
