Johannesburg - South African bonds remained weak during the
morning session on Friday as the unchanged rates stance of Thursday
continued to lead to long positions being unwound.
By 12:06 the benchmark R157 bond was yielding 7.750% after closing at 7.655% on
Thursday and the 10-year R207 was at 8.540% from 8.500% previously. The
long-term R186 was at 8.845% from 8.785% at its previous close.
The rand was bid at R7.4274 to the dollar from R7.4347 at its previous close.
The Sarb's decision to hold the repo rate steady on Thursday disappointed
the bond market, which priced in a 50 basis point repo rate cut, leading
investors to take profits yesterday afternoon. This trend has persisted on
Friday morning.
"This trend is continuing this morning, with the slightly softer rand adding to bond
market losses," said Nedbank Capital's bond experts in a note.
An inflation linked government bond auction too placed during the morning, worth
R600m will be offered in R212, R210 and R202s.
Clearing yields of 3.030%, 3.080% were achieved on the R212 and R210, while the R202
did not receive a successful bid. The total amount of R600m,
though, was allocated across the two bonds that attracted successful
bids.
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