South African bonds were up to 18 basis points weaker by noon, but a dealer said the market was holding up remarkably well in light of the global crisis and the dismal position of the currency.
Bonds started weakening to an extent after the unchanged rates decision on Thursday as the authorities appeared to pour cold water on any hopes rates would be coming down sooner and faster than expected.
By 12:00 the short-term government R153 bond was at 9.330% from its previous close of 9.280%. The medium-term R157 was at 9.010% from 8.870% at Thursday’s close and the long-term R186 was bid at 8.745% from 8.570% before.
The rand was last at 9.3700 per dollar from a previous 9.3145.
The local bond trader also said that local bonds were looking good when compared with some other emerging market risk spreads.
"I think flows out of equities will benefit us for a while," he concluded.
Another dealer said yesterday’s rates decision in which the repo was kept on hold at 12% - was not unexpected.
"The Governor warned of the potential risks," noted the dealer.
Dow Jones Newswires reports that as fears of a global recession sent equity markets diving by nearly 10% in places, the dollar found itself falling out of favour in Europe on Friday
Foreigners were net buyers of 606.798 million rand worth of South African bonds on Thursday after net sales of 4.207 billion rand worth of local bonds on Wednesday, Bond Exchange of South Africa statistics show.
Nominal cumulative volume was 49.371 billion rand on Thursday from 64.677 billion rand on Wednesday. |
