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Johannesburg - South African bonds were softer in midday trade on Tuesday after a poor weekly bond auction at 11:00 resulted in capitulation amongst bond bulls.
The National Treasury allotted R900m of R2023 bonds at a clearing yield of 6.440%‚ R900m of R213 bonds at a clearing yield of 7.620% and R550m of R214 bonds at a clearing yield of 8.180%.
Bids received amounted to R1.155bn‚ R2.41bn and R695m respectively.
“The bond auction was a shocker and just shows you how bad the lack of political leadership on the industrial relations front is playing out‚” a local bond trader said.
At 11:38 the benchmark R186 was trading at 6.990% from 6.920% at Monday’s close and 6.820% at Friday’s close.
The R157 was trading at 5.160% from 5.105% at its previous close‚ and the R207 was bid at 6.055% and offered at 6.025% from 5.965% at its previous close.
The rand was bid at R9.5135/$ from R9.4313 at Monday’s close and R9.4002 at Friday’s close.
The South African Reserve Bank leading business cycle indicator began to weaken once more in March after a brief recovery in the second half of last year and early this year.
On a month-on-month basis‚ the indicator declined by 1.1% with six of the ten components declining.
