Johannesburg – South African bonds were weaker amid thin trade at midday on Monday as traders eye Tuesday’s bond auction.
“Very quiet start to the week with London flows missing due to the UK holiday. The market was around five basis points weaker across the board‚ tracking the rand‚” said Steve Arnold‚ a trader from Investec.
“Transnet held another successful auction this morning‚ receiving R199m in bids for the R100m on offer‚” he said.
At 11:15‚ the benchmark R157 bond was trading at 5.590% from 5.560% at Friday’s close. The R207 was bid at 6.700% and offered at 6.675%‚ and the R186 was bid at 7.615% and offered at 7.595%.
The rand was trading at R8.4011 per dollar from R8.3520 at Friday’s close.
“Market participants will also be keeping an eye out for the flurry of local data out this week i.e. second quarter GDP tomorrow followed by private sector credit extension and monthly budget numbers later in the week. Disappointing 2Q GDP has the potential to drive the market lower with another MPC in mid September‚” Arnold said.
Foreigners bought a net R1.386bn of South African bonds including repo transactions on Friday after net sales of R147.273m of local bonds on Thursday‚ data released by the JSE shows.
Nominal cumulative volume was R53.605bn on Friday from R62.611bn on Thursday.
Foreigners were net buyers of R1.479bn of local bonds excluding repo transactions on Friday after net sales of R87.951m of local bonds on Thursday.
For the year to date foreigners have been net buyers of R65.166bn 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 R64.114bn of local bonds including repo transactions. In 2011 they bought R37.501bn worth of local bonds.