By Jacqueline Mackenzie Bonds were little changed from overnight levels in early trade on Thursday, showing no reaction to the release of money supply and private sector credit extension (PSCE) data, released at 08.00am. By 08.40am the benchmark R157 bond was at 7.560% after closing at 7.570% on Wednesday and the 10-year R207 was bid at 8.265% from 8.255% previously. The long-term R186 was bid at 8.530% from 8.525% at its previous close. The rand was bid at R7.3270/$ from R7.3427/$ at its previous close. Data released by the Reserve Bank on Thursday morning showed that PSCE grew at a rate of 0.92% year-on-year (y/y) in June from 0.80% y/y in May. The rate of growth of South Africa's broad M3 money supply measure rose by 2.41% y/y in the year to end June from 1.40% y/y in the year to end May. The rate of growth in PSCE was expected at 1.0% y/y, while M3 money supply aggregate growth was expected at 2.3% y/y, according to an I-Net Bridge survey. Forecasts among the nine leading economists surveyed for PSCE ranged from 0.8% to 1.3%, while the range of forecasts for M3 was from 1.7% to 2.5% at the top of the range. A trader said the data did not contain any major surprises and the bond market had taken it in its stride. The market will now watch producer inflation data at 11.30am after Wednesday consumer inflation data came in better than expected, the trader added. The PPI is expected to have reached 7.5% y/y in June from the 6.8% y/y seen in May, a survey by I-Net Bridge has found. Forecasts among the 10 leading economists surveyed ranged from 6.5% y/y to 8.6% y/y. Foreigners were net sellers of R451.208 million of bonds including repo transactions on Wednesday, after net sales of R1.448 billion of local bonds on Tuesday, Bond Exchange of South Africa statistics show. Nominal cumulative volume was R81.591 billion on Wednesday from R149.466 billion on Tuesday. Foreigners were net sellers of R585.222 million of bonds excluding repo transactions on Wednesday, after net sales of R377.269 million of local bonds on Tuesday. In the year to date foreigners have been net buyers of R54.091 billion worth of local bonds, excluding repo transactions. So far for total transactions, including repo transactions, foreigners have been net buyers of R52.580 billion worth of bonds. In 2009 foreigners were net buyers of R27.755 billion worth of local bonds, excluding repo transactions, while for total transactions, including repo transactions, foreigners were net sellers of R2.424 billion worth of bonds. Source: I-Net Bridge |
