Johannesburg, Dec 22 (I-Net Bridge) - The rand was flat against the dollar in thin early morning trade on Thursday as it tracked a euro that had managed to stabilise after Wednesday's choppiness.
South African bonds were up to four basis points softer in extremely quiet trade, in line with the lacklustre rand.
By 08:35, the benchmark R157 bond was trading at 6.820% from its previous close of 6.780%. The R207 was bid at 8.000% and offered at 7.975% from a previous close of 7.950% and the R186 was bid at 8.580% and offered at 8.565% from its close of 8.540%.
A local trader said conditions were very thin and were expected to remain so until the second week of January when players start trickling back after the December holiday break.
The trader confirmed that activity would wind down around noon on Friday ahead of the Christmas holidays. The equity market also closes at midday tomorrow.
Foreigners were net sellers of R232.917 million of South African bonds including repo transactions on Wednesday after net sales of R640.254 million of local bonds on Tuesday, data released by the JSE shows.
Nominal cumulative volume was R27.041 billion on Wednesday from R56.813 billion on Tuesday.
Foreigners were net sellers of R225.358 million of South African bonds excluding repo transactions on Wednesday after net sales of R644.259 million of local bonds on Tuesday.
For the year to date, foreigners have been net buyers of R45.892 billion worth of local bonds, excluding repo transactions.
In 2010 foreigners bought net R57.064 billion rand worth of local bonds, excluding repo transactions.
For the year to date for total transactions, including repo transactions, foreigners have been net buyers of R36.017 billion of local bonds. In 2010 they bought net R44.541 billion worth of bonds.
A local currency trader told I-Net Bridge that the rand had had "a complete turnaround as there's been immense pressure on the euro".
"I think dollar rand will be contained at 8.28 for the trading session, but one never knows what's going to happen in the eurozone."
The trader stressed that as markets were thin, any moves appeared exaggerated.
At 08:37 local time, the rand was bid at R8.2296 to the dollar from its previous close of R8.2322. It was bid at R10.7476 to the euro from R10.7223 before, and at R12.8954 against sterling from R12.8828 previously.
The euro was bid at US$1.3064 from its previous close of US$1.3036.
Meanwhile Dow Jones Newswires reported that the euro had stabilised against the dollar on Thursday in Asia after choppy trade the previous day as the European Central Bank moved to ensure adequate funding to banks.
The common currency rose early on Wednesday in anticipation of the operation's outcome. Hundreds of banks took out 489.19 billion euros in low-interest, three-year loans from the ECB under a programme introduced earlier this month so banks could keep lending to firms and individuals.
Expectations were high for the operation, buoying the single currency ahead of the results. But profit-taking kicked in soon after the outcome, triggering a sell-off in the euro amid thin trading, Tokyo dealers said.
Investors' lack of confidence in the operation was apparent, as Italian and Spanish bonds inched higher.
"Credit uncertainty is deeply rooted, but the operation is likely to ease some funding constraints given that massive demand," said Tomohiro Nishida, senior dealer at Chuo Mitsui Trust and Banking. "The operation gave some sense of relief."
Another batch of three-year loans was expected to be available on February 29.
BONDS
08:35 local time Range so far Previous
(06:35 GMT) Close
R157 (2016) 6.820% 6.820% - 6.830% 6.780%
R207 (2020) 8.000% bid 8.000% - 8.005% 7.950%
R186 (2026) 8.580% bid 8.580% - 8.595% 8.540%
Bond Exchange of South Africa (in billions of rand)
Wednesday Tuesday
Nominal cumulative volume R27.041 R56.813
Net foreign purchases/(sales) (R0.225) (R0.640)
Net foreign purchases/(sales) in 2011: R36.017 billion rand
Net foreign purchases in 2010: 44.541 billion rand
Repo rate: 5.5%
RAND
Bids: 08:37 local time Range so far Previous Close
(06:37 GMT)
Dlr/Rand 8.2296 8.2107-8.2721 8.2322
Euro/Rand 10.7476 10.7030-10.7913 10.7223
Sterling/Rand 12.8954 12.8537-12.9557 12.8828
Euro/Dollar 1.3064 1.3032-1.3069 1.3036
End
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