South African bonds remained firm but were off the day's best levels in midday play on Tuesday
South African bonds remained firm but were off the day's best levels in midday play on Tuesday. A local trader said the weekly government bond auction went "okay".
By 11:50, the benchmark R157 bond was trading at 7.790% from its previous close of 7.825%, while the R207 was bid at 8.725% from its previous close of 8.740%. The R186 was trading at 8.930% from a close of 8.960%.
The rand was bid at 6.9655 to the dollar from its previous close of 6.8277.
"Bonds sold-off a bit after the auction, but the rand is a bit weaker. All in all, the auction went okay. The R214s - the ultra-long one - was not great, it cleared two or three points above market. Interestingly, we thought the R186s would sell-off a bit but the spreads are holding nicely. We haven't done much today, though, it's been quiet," said a local trader.
At its weekly auction on Tuesday, the National treasury received bids totalling 2.40 billion rand for 1.1 billion rand worth of R204 bonds and bids totalling 1.67 billion rand for one billion rand worth of R214 bonds.
Earlier, Standard Bank said in a report that South African curves demonstrated resilience in quiet trade on Monday.
"A lack of domestic influences allowed global factors to drive the move lower across the term structure yesterday. Vulnerability in the oil price, supportive US treasury levels and (unexpected) renewed hope surrounding the European sovereign debt crisis provided all the impetus required. A soft confidence reading merely encouraged the already conducive environment," it said.
Standard Bank added that today was unlikely to see this sentiment substantially reversed.
Foreigners were net sellers of R1.022bn of South African bonds including repo transactions on Monday after net sales of R273.818m on Friday, Bond Exchange of South Africa statistics show.
Nominal cumulative volume was R69.894bn on Monday from R48.695bn on Friday.
Foreigners were net sellers of R770.002m of South African bonds excluding repo transactions on Monday after net sales of R273.708m on Friday.
For the year to date, foreigners have been net sellers of R13.169bn worth of local bonds, excluding repo transactions. In 2010 foreigners bought net R57.064bn worth of local bonds, excluding repo transactions.
For the year to date for total transactions, including repo transactions, foreigners have been net sellers of R14.771bn of local bonds. In 2010 they bought net 44.541 billion rand worth of bonds.
