Orders jump at SA bond sale as investors see value | Fin24
 
  • Unchanged

    The Reserve Bank is unlikely to hike rates on Thursday, according to economists.

  • SA's high data costs

    Fin24 unpacks the issues in the first of this four-part series.

  • Fin24’s newsletter

    Sign up to receive Fin24's top news in your inbox every morning.

Loading...

Orders jump at SA bond sale as investors see value

Aug 14 2018 20:35
Robert Brand and Colleen Goko, Bloomberg

South Africa just had its strongest bond auction since March, a sign investors see value in the country’s debt after a sell-off sparked by Turkey’s currency woes.

Traders placed R9.77bn of orders, or more than four times the R2.4bn of securities on sale, at the scheduled weekly Treasury auction on Tuesday, according to data published by the Reserve Bank.

South African yields surged to two-month highs on Monday as Turkey’s currency meltdown sapped demand for emerging-market assets.

Rates on benchmark 2026 government notes climbed to 9.02%, the highest among investment-rated peers, attracting local buyers even as foreign investors dumped the debt at the fastest rate since June. Nine South Africa-based primary dealers participate in the weekly auctions.

“The auction cleared strong today as investors took advantage of higher yields to add risk to their portfolios,” said Michelle Wohlberg, a trader at FirstRand Bank [JSE: FSR] in Johannesburg.

“Local investors are seeing this as a perfect opportunity to buy bonds at attractive yields. as the panic seen yesterday is perceived as slightly overdone.”

Yields on 2026 government securities fell eight basis points on Tuesday to 8.94%, paring the rise in the past three trading sessions to nine points.

The bonds have lost 11% this month in dollar terms, the worst performance after Turkish debt, which is down 36%, according to Bloomberg Barclays indices. 

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

bonds  |  sa economy  |  markets
NEXT ON FIN24X

 
 
 
 

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Are you worried about debt in January?

Previous results · Suggest a vote

Loading...