Bonds firm after Sarb data

2012-12-06 15:53

Johannesburg - The South African bond market was firm in quiet midday trade on Thursday after the release of the South African Reserve Bank’s (Sarb) Quarterly Bulletin at 10:00, which showed that the current account deficit remained at 6.4% of GDP in the third quarter rather than deteriorating further.

“The current account data was better than expected‚ but the market is worried about this quarter’s deficit given the record foreign trade deficit in October‚” a local bond trader said.

At 11:30‚ the benchmark R186 was trading at 7.460% from 7.495% at Wednesday’s close and 7.580% at Tuesday’s close. The R157 was trading at 5.480% from 5.495% at its previous close. The R207 was bid at 6.495% and offered at 6.480%‚ from its previous close of 6.495%.

The rand was bid at R8.7523/$ from Wednesday’s close of R8.7667 and Tuesday’s close of R8.7856.

SA’s volume of merchandise exports increased by 1.4% in the third quarter due to higher export volumes of agricultural and manufactured products‚ SARB’s quarterly bulletin (QB) showed on Thursday.

The increase was only partly offset by a contraction in the volume of mining exports. Mining strikes that occurred during the quarter negatively affected production in the sector during the third quarter.

It was estimated that the volume of mining exports contracted by about 5.0% over the period‚ marking a third consecutive quarterly decline.

The Reserve Bank said that in addition to domestic supply constraints‚ the decrease in the volume of mining exports could be attributed to subdued foreign demand for South African produced mineral products‚ and for base metals and articles of base metals notably coal‚ iron ore and steel destined primarily for China‚ Japan‚ and India.

Merchandise exports rose to R692.7bn in the third quarter from R688.6bn in the second.

The volume of merchandise imports rose by 1.6% in the quarter while the value of merchandise imports remained broadly unchanged at around R844bn.

The volume of merchandise imports rose despite a contraction in the physical quantity of mining imports.

The decline in mining imports could mainly be attributed to lower non-oil imports‚ as crude oil imports rose notably over the period.