AIRLINK 62.48 Increased By ▲ 2.05 (3.39%)
BOP 5.36 Increased By ▲ 0.01 (0.19%)
CNERGY 4.58 Decreased By ▼ -0.02 (-0.43%)
DFML 15.50 Increased By ▲ 0.66 (4.45%)
DGKC 66.40 Increased By ▲ 1.60 (2.47%)
FCCL 17.59 Increased By ▲ 0.73 (4.33%)
FFBL 27.70 Increased By ▲ 2.95 (11.92%)
FFL 9.27 Increased By ▲ 0.21 (2.32%)
GGL 10.06 Increased By ▲ 0.10 (1%)
HBL 105.70 Increased By ▲ 1.49 (1.43%)
HUBC 122.30 Increased By ▲ 4.78 (4.07%)
HUMNL 6.60 Increased By ▲ 0.06 (0.92%)
KEL 4.50 Decreased By ▼ -0.05 (-1.1%)
KOSM 4.48 Decreased By ▼ -0.09 (-1.97%)
MLCF 36.20 Increased By ▲ 0.79 (2.23%)
OGDC 122.92 Increased By ▲ 0.53 (0.43%)
PAEL 23.00 Increased By ▲ 1.09 (4.97%)
PIAA 29.34 Increased By ▲ 2.05 (7.51%)
PIBTL 5.80 Decreased By ▼ -0.14 (-2.36%)
PPL 107.50 Increased By ▲ 0.13 (0.12%)
PRL 27.25 Increased By ▲ 0.74 (2.79%)
PTC 18.07 Increased By ▲ 1.97 (12.24%)
SEARL 53.00 Decreased By ▼ -0.63 (-1.17%)
SNGP 63.21 Increased By ▲ 2.01 (3.28%)
SSGC 10.80 Increased By ▲ 0.05 (0.47%)
TELE 9.20 Increased By ▲ 0.71 (8.36%)
TPLP 11.44 Increased By ▲ 0.86 (8.13%)
TRG 70.86 Increased By ▲ 0.95 (1.36%)
UNITY 23.62 Increased By ▲ 0.11 (0.47%)
WTL 1.28 No Change ▼ 0.00 (0%)
BR100 6,944 Increased By 65.8 (0.96%)
BR30 22,827 Increased By 258.6 (1.15%)
KSE100 67,142 Increased By 594.3 (0.89%)
KSE30 22,090 Increased By 175.1 (0.8%)

rand--JOHANNESBURG: South African government bonds edged higher on Wednesday with the market still receiving a boost by the inclusion of government paper in Citigroup's World Government Bond Index (WGBI) from the start of the week.

 

The yield on the three-year benchmark was 2.5 basis points lower at 5.39 percent and that for the 14-year issue dropped 3 basis points at 7.53 percent.

 

By 0655 GMT, the rand was down 0.87 percent at 8.444 versus the dollar after closing on Tuesday in New York at 8.3700.

 

"There's still a large overhang of long positions from the expectations of the inclusion in WGBI," said Ashley Dickinson, a bond trader at Renaissance Capital.

 

The long-awaited debut in the WGBI - first announced in June but not officially effective until Oct. 1 - puts South Africa alongside 22 other countries on the index, tracked by an estimated $2 trillion worth of funds.

 

But investor sentiment has also been tempered by a one-notch downgrade by Moody's last week of South African government bonds and weeks of wildcat strikes that have spread through the mining sector responsible for about six percent of gross domestic product.

 

"The market is possibly a little on the defensive for now, with the uncertainty over the strike action and the potential spread of that action," Dickinson said.

 

Speaking at a meeting of the Nordic-South African Business Association on Tuesday, Reserve Bank Governor Gill Marcus said inflows into the South African bond market could not be sustained at current levels though she expected demand to continue for some time.

 

Marcus added that foreign accounts had purchased about 84 billion rand ($10 billion) worth of local bonds since the start of the year, driven partly by WGBI-related demand.

 

Copyright Reuters, 2012

Comments

Comments are closed.