JOHANNESBURG: Yields on benchmark South African government bonds dropped 2.5 basis points, reflecting a recovery in the local market as offshore buying supported prices on Friday.
The yield on the 2015 bond fell to 5.47 percent while the 2026 issue dropped to 7.74 percent.
"There was a bit of late afternoon buying, particularly in the long end, which had taken a bit of knock. We saw real money buying early in the week and it looks like a continuation of that," said a local fixed income dealer.
Bonds and the currency were finding support on Friday as some dealers said the selling looked overdone, even though there was a risk of yields spiking again.
The rand was at 8.9330/ dollar at 0644 GMT, after weakening to nearly 9 rand on Thursday, which would be a 3-1/2 year low. "There was a general risk-off scenario around the world and the charge into risk assets dissipated a little bit," said Malcolm Charles, a fixed income portfolio manager at Investec.
"People are cautious on South Africa and markets are nervous because of that."
The last time the currency came near the 9 rand/dollar level was on October 8, when market players speculated the central bank had stepped in to stop the currency hitting the key level.
"As long as dollar/rand stabilises near 8.90 today and ends the week above 8.84, then the uptrend remains firmly in place," said Absa Capital's Judy Padayachee, adding that she expected a 8.89-8.98 range in the session.
The bank said it was looking to buy dollars at 8.88-8.90 today to target 9.20 in the weeks ahead.
Treasury will sell inflation-linked 2022, 2038 and 2050 paper at 0900 GMT, with results due after the auction closes.