/ 21 August 1998

Markets fall as bonds peak

OWN CORRESPONDENT, Johannesburg | Thursday 8.00pm.

SOUTH African shares ended today’s session near their lows as a late burst of selling forced the entire market down. Dealers said JSE shares were pummeled by bad news, including weaker international markets, a declining currency exchange rate and concerns about emerging economies’ debt.

The All share index closed on 6314,4 down 70,0 points. The Industrial index fell by 85 points to close on 7330,9, while the Financial index lost 226,2 points to end on 10,768. The All gold index closed on 888,0 down 19,2 points.

Local bond yields went to their highest levels since October 1991 after primary market makers hedged their Development Bank of South Africa (DBSA) book by selling the benchmark R153 and R157 bonds.

The benchmark R150 closed trade on a yield of 17,390%, and the longer term R153 closed on 17,015%.

The Rand closed in the middle of its range in a day marked by major dollar purchases thought by dealers to be the UK’s Cable & Wireless pulling the proceeds of its sale of its stake in mobile phone company MTN.

The Rand closed on 6,3400 to the Dollar, and closed on 10,330 to the Sterling. Gold traded at the close on USD/oz 284,80, after closing Wednesday on 283,60.