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“It seems we have a dichotomy in the bond market as the short end continues to price in stable rates‚ while the long end reflects the view that the next move in the repo rate will be higher. That may be due to carry trade activity‚ as we still offer attractive returns compared with those available overseas‚ but those hot money flows are like a coiled spring and can be unwound very quickly‚” a local trader said.
At 15:33‚ the benchmark R157 bond was trading at 5.670% from Tuesday’s close of 5.670%‚ the R207 was bid at 6.735% and offered at 6.715% from its previous close of 6.680% and the R186 was trading at 7.515% from its previous close of 7.480%.
The rand was bid at R8.2102 against the dollar from R8.1892 at its previous close.
Growth in SA’s retail trade sales at constant prices rose by 8.3% year on year (y/y) in June after a revised 7.1% (6.4%) y/y increase in May‚ figures released on Wednesday by Statistics SA showed.
Forecasts among the economists polled by I-Net Bridge had ranged from 2.3% to 5.4%.
Measured in real terms‚ seasonally adjusted retail trade sales increased 1.9% in June compared with May.
This followed month-on-month changes of -0.6% in May and 1.2% in April.
Foreigners were net buyers of R833.853m of South African bonds including repo transactions on Tuesday after net sales of R827.382m of local bonds on Monday‚ data released by the JSE show.
Nominal cumulative volume was R208.829bn on Tuesday from R88.472bn on Monday.
Foreigners were net buyers of R1.104bn of local bonds excluding repo transactions on Tuesday after net sales of R1.073bn of local bonds on Monday.
For the year to date foreigners have been net buyers of R66.369bn 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 R67.746bn of local bonds including repo transactions. In 2011 they bought R37.501bn worth of local bonds.
