/ 4 April 2005

Bonds stay soft in dull trade

South African bonds stayed a touch softer in dull midday trade on Monday with the market looking for direction.

At noon, the key South African six-year R153 bond was yielding 8,260% – 7 basis points softer than its previous close of 8,190%. The five-year R194 bond was untraded from its previous close of 7,870%, while the 11-year R157 bond was 8,660% after closing at 8,600% on Friday.

The rand was last quoted at R6,1955 per dollar, a tad firmer than its Friday close of R6,2291.

“Trading is deadly dull, as there is nothing to move the market. Even the rand is range-bound, so I guess we will only get some action on Tuesday when we have the weekly bond auction,” said a bond trader.

The National Treasury announced last week that it would auction R250-million worth of R153 bonds and R650-million worth of R204 bonds on April 5.

South African new vehicle sales in March 2005 continued to build on the good sales in the previous year with new vehicle sales rising by 12,2% year-on-year (y/y) to 43,651 units, which is a record for a March month. Lack of stock in the light commercial vehicle segment constrained sales growth.

The March increase is an easing in the y/y growth rate from February’s 32,5% y/y surge to 42,822 units and January’s rise of 20,9% y/y to 40,264 units and compared with last year’s 22% sales growth to 449,603 units or a monthly average of 37,467.

Foreigners were net buyers of R560,295-million worth of South African bonds on Friday after net purchases of R944,84-million worth of local bonds on Thursday, Bond Exchange of South Africa statistics show.

Nominal cumulative volume was R31,979-billion on Friday from R21,345-billion on Thursday. — I-Net Bridge