* Longer term bonds gain
* Rand to continue trading in a choppy tight range
JOHANNESBURG, June 28 (Reuters) – South African bonds firmed
for the fourth straight day on Thursday as foreign investors
looking for yield piled into the market while the rand remained
stuck in a range.
Offshore players were especially keen on the longer dated
paper with the 14-year maturity falling 7.5 basis
points to 7.95 percent and the 3-year paper shedding
2.5 basis points to 5.995 percent.
Yields for both are near historic lows as local interest
rates remain near 3-decade troughs. But they are high by global
standards at a time when investors are desperately searching for
good returns against market uncertainty.
Citi sub-Saharan Africa strategist Leon Myburgh pointed out
in a brief note that non-resident flows into domestic bonds have
remained positive in recent days while there has been an outflow
from the equities market.
South African bonds have benefited from the country’s
inclusion in a prestigious Citi bond index which is likely to
attract more inflows despite rating agencies’ downgrades.
The rand was little changed at 8.43 against the dollar as
the market awaits news from the 2-day European Union summit
which started Thursday amid fading hopes that the debt woes of
the euro zone – South Africa’s biggest trading partner – can be
resolved.
“It got itself into a tight range and it is very much a
headline driven market,” said Jim Bryson, a rand trader at Rand
Merchant Bank.
Continued…
