Foreigners stock up on local bonds for second consecutive week
Foreigners bought more than R1bn worth of local bonds last week, pushing the rand to a high of R12.79 to the dollar
Foreign investors were net buyers of local bonds for the second week in a row, a development that partly helps explain the recent bout of rand strength. Foreigners bought a net R1.2bn worth of local bonds last week, according to the JSE data, pushing the rand to a high of R12.79 to the dollar — its best since 2015. The buying momentum coincided with SA’s 2017-18 budget speech, which sought to maintain sound fiscal discipline. The budget deficit as a percentage of GDP was forecast at 3.1% in 2017-18 financial year, unchanged from an earlier estimate in the October mid-term budget. The projected budget deficit for 2016-17 was 3.4% of GDP. The yield on the benchmark R186 bond was at 8.78% at lunchtime on Monday, from 8.70% on Friday. This compares favourably to the equivalent US 10-year note that stood at 2.3373%. Meanwhile, foreigners were net sellers of local shares to the tune of about R266m last week, bringing the tally in net equity sales since the start of the year to nearly R24b...
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