* Market uncertain about Greek bailout
* Bonds still supported by volumes thin
JOHANNESBURG Feb 13 (Reuters) – The South African
rand strengthened against the dollar on Monday but relinquished
some of its earlier gains in an uncertain market still awaiting
a resolution to Greece’s debt woes.
Demand for high-yielding local debt held up fairly well,
although traders said investors were reluctant to take
significant positions ahead of a meeting later in the week on a
bailout for Greece.
The rand gained as much as 1.2 percent to a session high of
7.6440/dollar in morning trade, but came off to 7.7050 by 1551
GMT, up 0.45 percent from Friday’s 7.7395 close in New York.
“There’s still a lot of uncertainty in the market and we’ve
seen the euro come back from 1.3260/dollar this morning right
down to 1.3220. There’s just a little bit of risk aversion and
on the back of that you’ve seen the rand back above 7.70 again,”
said Brigid Taylor, Head of Institutional Sales at Nedbank.
“We’re looking, at the moment, at a range of 7.65-80 for the
rest of the week with upside (weaker) potential purely because
of the uncertainty around the outcome in Greece. If this all
does get resolved it will be good for risk appetite around
emerging markets, specifically the high yielders because
interest rates are flat globally.”
High yields compared to those in developed countries have
kept investors interested in South African debt, with foreigners
buying a net 989.2 million rand worth of local bonds last week.
On Monday the yields on the benchmarket three-year
and 14-year bonds each closed 6.5 basis points lower
at 6.575 percent and 8.245 percent respectively.
Continued…
