* Demand at auction drives yields down
* Treasury likely to issue new bonds at next budget
* Rand breaks key support at 8.00
(Adds details, background, analyst comment)
JOHANNESBURG, Jan 24 (Reuters) – Strong demand at
South Africa’s weekly debt auction pushed yields lower on
Tuesday, with dealers saying offshore investors were the likely
buyers.
The National Treasury offered and sold 1.1 billion rand
($138.86 million) of 2017 paper at a lower yield,
after receiving 4.95 billion rand worth of bids for the bond.
The 5-year bond cleared at a yield of 7.3 percent, down from
7.47 percent at its last sale in October and was covered 4.5
times.
“Very strong bids in auction today. The R203 cleared 5 basis
points below market and the R208 at 3 basis points below.
Someone obviously wanted them,” said Steve Arnold, a bond trader
at Investec Bank.
There was talk that offshore buyers were snapping up bonds
but the Johannesburg Stock Exchange will not release
those statistics until the end of trade.
The longer-dated 2021 issue was 2.535 times
subscribed, clearing at a much lower yield of 7.85 percent from
8.13 percent previously.
Continued…
