* Offshore bond flows prop up rand against dollar
* Treasury to announce issuance plans at 0900 GMT
* June business confidence due at 0930 GMT
JOHANNESBURG, July 11 (Reuters) – South African government
bonds hit fresh record highs early on Wednesday, supported by
persistent foreign buying and local investors pricing in a
dovish central bank statement at a monetary policy decision next
week.
The rand firmed 0.27 percent against the dollar to
8.1980 at 0630 GMT, compared to a 8.22 close in New York.
Dealers said although yields have plunged too quickly and
aggressively, it was hard to call a reversal just yet as
offshore buying showed no signs of easing. Analysts see yields
consolidating near their record lows.
“With expectations rising of a rate cut at the next week’s
SARB Monetary Policy Committee meeting coupled with the World
Government Bond Index in October it is a good time to own South
Africa bonds,” said Warrick Butler, a trader at Standard Bank.
South African debt will be included in Citigroup’s WGBI from
Oct. 1, the main factor underpinning the increased flows into
the market.
The yield on the three-year benchmark bond, the most liquid
government debt instrument, was at a fresh record low
of 5.865 percent while that on the 2021 issue hit a
new low at 7.045 percent.
Continued…
