Bonds softer despite good PMI

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IOL business dec3 bonds Independent Newspapers File photo.

Johannesburg‚ Dec 3 (I-Net Bridge) - The South African bond market was softer in quiet midday trade on Monday despite a recovery in the November purchasing managers' index (PMI) to 49.5 from 47.1 in October.

The PMI is a key leading indicator for activity in the manufacturing sector and is conducted on a monthly basis by the Bureau for Economic Research (BER) and the Chartered Institute of Purchasing and Supply.

An index level of below 50 represents contraction in the manufacturing sector‚ while a reading of more than 50 signifies expansion in activity.

The BER noted that while the PMI improved last month‚ it remained below 50 for the third consecutive month.

“We failed to get a boost from the PMI even though it had a positive impact on the rand‚” a local bond trader said.

At 11.57am‚ the benchmark R186 was trading at 7.615% from 7.580% at Friday's close. The R157 was trading at 5.520% from 5.495% at its previous close. The R207 was bid at 6.550% and offered at 6.525%‚ from its previous close of 6.505%.

The rand was bid at R8.8671 per dollar from Friday's close of R8.8909.

11.57am Range so far Previous Close

(9.57am GMT)

R186 (2026) 7.615% 7.600% - 7.625% 7.580%

R157 (2016) 5.520% 5.490% - 5.540% 5.495%

R207 (2020) 6.550% bid 6.525% - 6.555% 6.505%

Bond Exchange of South Africa (in billions of rand)

Thursday Friday

Nominal cumulative volume R68.834 R58.896

Net foreign purchases/(sales) R0.214 (R0.260)

Net foreign purchases/(sales) in 2012: R83.417 billion

Net foreign purchases in 2011: R37.501 billion

Repo rate: 5.0%

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