Filomena Scalise

Johannesburg‚ Dec 6 (I-Net Bridge) - The long end of the South African bond market firmed in Thursday afternoon trade on a stronger rand.

“The stronger rand has helped the long end. It seems as if problems in Europe and the US are leading to safe haven flows into emerging market bonds‚ as the longer end is preferred by foreigners‚” a local bond trader said.

At 3.42pm‚ the benchmark R186 was trading at 7.420% from 7.495% at Wednesday's close and 7.580% at Tuesday's close. The R157 was trading at 5.470% from 5.495% at its previous close. The R207 was bid at 6.485% and offered at 6.455%‚ from its previous close of 6.495%.

The rand was bid at R8.7289 per dollar from Wednesday's close of R8.7667 and Tuesday's close of R8.7856.

Dow Jones Newswires reported that the European Central Bank left its official interest rates unchanged for the fifth month in a row‚ in line with financial markets' expectations‚ while the Bank of England kept the central bank's key interest rate at 0.5% and the size of its bond-buying stimulus programme at £375 billion.

Businesses cut investment and drew down on stocks to meet demand in the three months to September‚ pushing the eurozone economy into its second straight quarter of contraction.

The White House hardened its position that Congress should raise the US's borrowing limit without preconditions‚ adding an unpredictable new element into the high-stakes budget talks.

US Treasury Secretary Timothy Geithner said that the Obama administration would be willing to go over the so-called “fiscal cliff” rather than accept a deal that doesn't include higher tax rates and an increase to the federal borrowing limit.

A series of measures outlined by the UK government will push the sovereign's ratio of debt to gross domestic product to the limit of what is acceptable for a triple-A rating‚ Fitch Ratings said.

3.42pm Range so far Previous Close

(1.42pm GMT)

R186 (2026) 7.420% 7.410% - 7.510% 7.495%

R157 (2016) 5.470% 5.470% - 5.505% 5.495%

R207 (2020) 6.485% bid 6.485% - 6.510% 6.495%

Bond Exchange of South Africa (in billions of rand)

Wednesday Tuesday

Nominal cumulative volume R61.755 R183.665

Net foreign purchases/(sales) (R0.161) R1.082

Net foreign purchases/(sales) in 2012: R84.061 billion

Net foreign purchases in 2011: R37.501 billion

Repo rate: 5.0%

-I-Net Bridge