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Firmer rand gives bond market small lift

The firmer rand gave bonds a small lift in quiet midday trade on Tuesday.

The rand's firmness was attributed to a more confident euro, following the release of Germany's ifo survey numbers.

Graphic: Renjith Krishnan.

“I think the rand has boosted the market somewhat, there doesn't seem to be any other drivers. On the whole, volumes are thin - many players are away so it's very quiet,” a bond trader said.

By 11:50, the benchmark R157 bond was trading at 6.890% from its previous close of 6.900%. The R207 was bid at 8.045% and offered at 8.045% from a previous close of 8.090% and the R186 was bid at 8.615% and offered at 8.595% from its close of 8.640%.

Foreigners were net sellers of R71.436 million of South African bonds including repo transactions on Monday after net sales of R620.633 million of local bonds on Thursday, data released by the JSE shows. SA markets were closed Friday for a public holiday.

Nominal cumulative volume was R43.503 billion on Monday from R11.073 billion on Thursday.

Foreigners were net sellers of R66.419 million of South African bonds excluding repo transactions on Monday after neat sales of R621.420 million of local bonds on Thursday.

For the year to date, foreigners have been net buyers of R46.761 billion worth of local bonds, excluding repo transactions.

In 2010 foreigners bought net R57.064 billion rand worth of local bonds, excluding repo transactions.

For the year to date for total transactions, including repo transactions, foreigners have been net buyers of R36.890 billion of local bonds. In 2010 they bought net R44.541 billion worth of bonds.

Dow Jones Newswires reported that the euro was at a day's high in European trade against the dollar following the release of the German Ifo Survey at 11h00 SA time.

The Ifo survey printed a better-than-expected figure at 107.2 vs the 106 expected.

The survey provided “an encouraging sign of strength” in the German economy, despite the raging eurozone debt crisis,” Dow Jones Newswires added.

At 11:37 local time, the rand was bid at R8.3066 to the dollar - or 0.89% firmer - from its previous close of R8.3852. It was bid at R10.8252 to the euro from R10.9031 before, and at R12.9289 against sterling from R12.9973 previously.

The euro was bid at US$1.3042 from its previous close of US$1.3005. - I-Net Bridge

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