South African bonds were weaker in midday trade on Monday in what a trader described as a "cheapening" of the market ahead of the government auction tomorrow.
South African bonds were weaker in midday trade on Monday in what a trader described as a "cheapening" of the market ahead of the government auction tomorrow.
By 11:50 the benchmark R157 bond was at 7.390% from 7.350% at its close on Friday, while the R207 was bid at 8.070% and offered at 8.040% from 8.030% at its previous close. The R186 was bid at 8.080% and offered at 8.070% after closing at 8.065%.
The rand was bid at 7.1355 to the dollar unchanged from its previous close.
"Bonds are weaker on poor price action. There isn't much activity but the market has moved into defensive mode ahead of the weekly auction tomorrow, so we're seeing some cheapening," a local trader said.
Earlier in the day another trader said that bonds were tentative and gauging where the next move will be.
"In terms of data, we'll keep an eye on the Reserve Bank's current account figure due later this week," he said.
This week will be a busy one for local economic data releases.
The South African Reserve Bank's (SARB) Quarterly Bulletin, quarterly employment and current account figures will be released on Wednesday. Stats SA will also release retail sales figures for July on Wednesday.
Foreigners were net buyers of R727.546m of South African bonds including repo transactions on Friday after net sales of R1.953bn of local bonds on Thursday, Bond Exchange of South Africa statistics show.
Nominal cumulative volume was R64.045bn on Friday from 86.693 billion rand on Thursday.
Foreigners were net buyers of R726.115m of South African bonds excluding repo transactions on Friday after net sales of R2.331bn of local bonds on Thursday.
In the year to date foreigners have been net buyers of R77.402bn worth of local bonds, excluding repo transactions.
So far for total transactions, including repo transactions, foreigners have been net buyers of R71.209bn 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.
