Bonds firmer as rand claws back ground

January 10, 2016, 8:53am

By Ray Faure, Business Day Live
Photo: Thinkstock

SOUTH African bond yields were firmer in late trade on Friday after a minor relief rally by the rand, as global markets recovered from the turmoil of the past few days.

Gains by Chinese stocks, a steadier yuan and a recovery in oil prices on Friday helped calm frazzled investors after a tumultuous week that saw an estimated $2.3-trillion wiped off global equity markets.

A relatively well-received local inflation-linked (linker) bond auction — the first of 2016 — also helped support the local fixed-interest market.

The Treasury auctioned R650m worth of I2033, I2045 and I2050 bonds on Friday morning.

At 3.45pm the benchmark R186 was bid at 9.510% and offered at 9.480% from Thursday’s close of 9.610%.

The middle-dated R207 was bid at 8.970% and offered at 8.960% from its previous close of 9.055%.

At the same time, the rand was at R15.9812 against the dollar from a close of R16.0756 on Thursday. It plummeted to a record low of R16.2030 against the greenback on Thursday as the rout in global markets continued amid concern about a slowdown in the Chinese economy.