The South African bond market was trading in very quiet territory at noon on Tuesday, after a successful bond auction on, with all bonds clearing at market.
At 12.01pm the benchmark R157 bond was trading at 5.490% from Monday’s close of 5.460%. The R207 was bid at 6.460% and offered at 6.430% from its previous close of 6.415% and the R186 was bid at 7.295% and offered at 7.280% from its previous close of 7.275%.
The rand was bid at R8.1888 against the dollar from Monday’s close of R8.1644.
"The bond auction went very well despite a very quiet market and all the bonds cleared at market, which was a pleasant surprise. There was fair demand for all of the bonds with no nasty surprises," a local bond trader said.
The South African Treasury on Tuesday allotted R800 million worth of R2023 bonds at a clearing yield of 6.960%‚ R800 million worth of R214 bonds at a clearing yield of 7.920% and R500 million worth of R2048 bonds at a clearing yield of 8.130%.
Meanwhile Spanish and Italian two-year yields climbed on Tuesday as investors moved to lock in profits from the recent strong run of the countries’ shorter-dated bonds.
Despite the rise, which traders said was exaggerated by light trading volumes, market participants did not expect a major reversal for short-end bonds, which should remain propped up by hopes of European Central Bank intervention.
Spain’s two-year yield climbed 34 basis points to 3.43%, while the equivalent Italian yield rose 26 basis points to 3.28% on Tuesday. Still, both countries’ yields remained well below levels seen last week — more than 5% and 4% respectively — when ECB President Mario Draghi outlined proposals to buy short-dated Spanish and Italian debt in the secondary market, sparking the recent rally, Dow Jones Newswires reported.
Foreigners were net buyers of R178.641m of South African bonds including repo transactions on Monday after net purchases of R1.584bn of local bonds on Friday‚ data released by the JSE show.
Nominal cumulative volume was R62.152bn on Monday from R62.580bn on Friday.
Foreigners were net sellers of R634.737m of local bonds excluding repo transactions on Monday after net purchases of R1.384bn of local bonds on Friday.
For the year to date foreigners have been net buyers of R67.731bn of local bonds‚ excluding repo transactions. In 2011 they were net buyers of R47.359bn worth of local bonds‚ excluding repo transactions.
In the year to date foreigners have been net buyers of R64.737bn of local bonds including repo transactions. In 2011 they bought R37.501bn worth of local bonds.
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