Johannesburg - Bonds were little changed in quiet noon trade on Monday, eyeing the rand for direction in the absence of fresh news.
By 12:00 the short-term government R154 bond was bid at 7.230%, unchanged from its previous close, and the medium-term R157 was bid at 7.370% after closing at 8.380% previously. The long-term R186 was bid at 9.175% from 9.165% previously.
The rand was bid at R7.5562 to the dollar from R7.5774 at its previous close.
A local bond trader said bonds are likely to take their lead from the currency this week. This will be a quieter week on the local data calendar, with the January PMI, new vehicle sales and Sarb net reserves data the highlights.
AbsaCapital analysts said in their morning report that in line with the upward momentum observed in a number of real economic indicators, they expect the January survey of purchasing managers to continue to build on the last two months' above-50 prints, adding further credence to their view for the domestic manufacturing sector to pull itself out of recession in Q1 10.
"New vehicle sales (Tuesday) should also continue to track higher in January after five consecutive months of improvement. However, we note that much of the improvement in the headline number will be largely down to favourable base effects rather than a rapid increase in new car sales, as domestic demand dynamics remain weak,"
The reserves data on Friday should show a small, $170m fall in net reserves to $38.8bn, owing largely to revaluation adjustments from a weaker gold price and EUR/USD in January.
"We maintain that the SARB is unlikely to have intervened in foreign exchange markets, with the fiscal funding pressures the country faces and the costs of sterilisation, in our view, too high," they said.
Foreigners were net buyers of R432.749m of bonds including repo transactions on Friday, after net purchases of R581.692m of local bonds on Thursday, Bond Exchange of South Africa statistics show.
Nominal cumulative volume was R23.882bn on Friday from R27.758bn on Thursday.
Foreigners were net buyers of R432.513m of bonds excluding repo transactions on Friday after net purchases of R580.954m of local bonds on Thursday.
In the year to date foreigners have been net sellers of R0.039bn worth of local bonds, excluding repo transactions.
So far for total transactions, including repo transactions, foreigners have been net buyers of R0.779bn worth of bonds.
In 2009 foreigners were net buyers of R27.346bn worth of local bonds, excluding repo transactions, while for total transactions, including repo transactions, foreigners were net sellers of R2.424bn worth of bonds.
