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 Issue: 21 January 2011 20:00

S.African bonds at 7-mth lows, stocks bounce back

By Stella Mapenzauswa and Tiisetso Motsoeneng

JOHANNESBURG (Reuters) - South African government bonds fell sharply on Friday, driving yields to their highest level in 7 months after central bank comments on rising inflation pressures dented prospects of interest rates cuts.

The bond sell-off, a day after the Reserve Bank left its repo rate steady at 5.5 percent, weighed on the rand, pushing the currency to a near 8-week low against the dollar at one stage.

Stocks ended higher, snapping two days of declines as firmer commodity prices and upbeat global equities lifted sentiment, with technicals pointing to further gains.

The yield on the benchmark 2015 bond soared to 7.905 percent, up 22.5 basis points from Thursday's close and reaching its highest level since early July 2010.

The yield on the longer-dated 2026 note rose as high as 8.835 percent, an 18 basis point gain on the day.

"The Reserve Bank left rates unchanged and the market feels they are now looking ahead and seeing higher inflation. It looks like there will not be any more rate cutting," a bond dealer in Johannesburg said.

Another trader said some investors had been caught with unsustainable long positions in the debt market and were looking to liquidate, adding: "We've also seen some activity in the swap market and the sell-off in bonds is also being driven by that."

Central bank Governor Gill Marcus's comments about monetary policy remaining stable for some time also showed in the forward rate agreement market, which suggested interest rates may rise 50 basis points to 6 percent in a year.

"Already stressed by the sharp rand sell-off of the past few days, 9x12's now look to be fully pricing in a 50 basis point rate hike," Absa Capital said in a note.

The rand reached a session trough of 7.14 against the dollar, the softest it has been since November 29, before clawing back some ground, helped by news power utility Eskom would repatriate all funds from a $1.75 billion 10-year bond issued this week.

By 1626 GMT the rand traded at 7.0850 against the greenback, little changed from Thursday's close of 7.0840.

The rand has shed 1.8 percent against the dollar this week, with some traders pointing to a stepped-up drive by the South African Reserve Bank (SARB) to accumulate forex reserves.


The Bank said on Thursday it would continue to build reserves as and when possible but added the local currency was expected to hold relatively firm.

"The same structural drivers that brought the rand stronger during 2010 remain intact in 2011 (although) in the near term strong profit taking and sizeable outflows from the bond market ... have seen the rand come under pressure," said Tradition Analytics.

Charts show the rand has crossed its 50-day moving average, suggesting a short- to medium-term weakening trend, but it remains above its 200-day moving average, pointing to long-term strength.

Johannesburg's Top-40 blue chip index gained 1.03 percent to 28,808.74 points and the broader All-share index was up 0.95 percent to 32,140.01.

"It's a nice turnaround considering where we were this morning. I think it was just an overreaction to worries about about China's monetary policy," Martin Lentsoane, a trader at NEWS Trading said.

Technicals show the blue chip index could post further gains in coming days. The index traded near its lower Bollinger Band, suggesting it may be oversold.

On Friday, Lewis climbed 3.82 percent to 75.20 rand after the retailer said quarterly sales rose 13 percent.

Miners also gained, lifted by higher commodity prices. Anglo Platinum was 1.26 percent better at 731.07 rand and BHP Billiton improved 1.86 percent to 274 rand.

Fri, 21 Jan 2011

South Africa's competition watchdog has given unions an additional 15 days to present more evidence against Wal-Mart's $2.3 billion bid for Massmart.  Full story
Japan's Kansai Paint said on Friday the board of Freeworld Coatings is intent on obstructing its takeover bid, the latest salvo in deal that looks likely to go hostile.  Full story
South African government bonds sharply extended losses on Friday, a day after the central bank left interest rates unchanged and hinted it might have ended a cutting cycle as inflationary pressures rise.  Full story
IT company Datatec, a re-seller of Cisco equipment, could beat its full-year targets as companies adapt to consumer technology and credit becomes more available, its chief executive said.  Full story

16h44 Petra Diamonds expects its $210 million acquisition of Finsch diamond mine from the world's largest diamond producer De Beers to boost. . .  Full story
14h20 South Africa's Harmony Gold said on Friday it expects gold production for the latest quarter to fall by as much as. . .  Full story
13h01 South African power utility Eskom will repatriate all funds from a $1.75 billion 10-year bond issued this week but is still. . .  Full story
12h38 South Africa's rand briefly recouped some losses against the dollar on Friday after power utility Eskom said it would repatriate all. . .  Full story

Trading Statistics


Major Moves Up
SharenameSaleMove% MoveVolume
1 CENMAG  164149.33.%10340
2 ERBACON  135108.00.%8877
3 KELLY  445255.95.%5550
4 SENTULA  283145.20.%47959
5 NICTUS  10555.00.%20000
6 EASTPLATS  1240534.47.%12987
7 CMH  1350503.85.%1564
8 LEWIS  75202773.82.%769956
9 URONE  39751373.57.%7228
10 GRANPRADE  300103.45.%284000
11 MVELASERV  1299393.10.%77303
12 AFEAGLE  16753.09.%15000
13 MTN  128303773.03.%8105755
14 AMA  20563.02.%224844
15 BARWORLD  67851752.65.%1756206
16 TRNSHEX  23562.62.%353446
17 MERAFE  15742.61.%7613784
18 ASSORE  204904902.45.%19444
19 CAPCO  1660392.41.%1494614
20 JDGROUP  52841242.40.%582946

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Major Moves Down
SharenameSaleMove% MoveVolume
1 MMG  199-11-5.24.%101721
2 ILIAD  863-37-4.11.%3700
3 PALCAP  305-9-2.87.%53500
4 FAMBRANDS  4079-120-2.86.%210064
5 METROFILE  205-6-2.84.%1960
6 SOVFOOD  650-19-2.84.%44800
7 RANGOLD  310-9-2.82.%3423
8 PBT  116-3-2.52.%164282
9 KEATON   390-10-2.50.%145420
10 IMPLATS  22178-557-2.45.%8293714
11 VERIMARK  160-4-2.44.%79058
12 PALLINGHT  449-11-2.39.%112874
13 WESCOAL  125-3-2.34.%25472
14 CAPITEC  16305-385-2.31.%80192
15 ELLIES   200-4-1.96.%571346
16 ADCORP  2800-50-1.75.%510
17 MONDIPLCP  5586-92-1.62.%576208
18 GROUP-5  3539-58-1.61.%152986
19 CADIZ  340-5-1.45.%71791
20 VALUE  385-5-1.28.%229

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New Highs
SharenameSaleHighMove% MoveVolume
1 AFEAGLE  16716853.09.%15000
2 SASOL  36560368074591.27.%1601549

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New Lows
SharenameSaleLowMove% MoveVolume
1 CAPITEC-N  4000382550.13.%35006

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Spot Prices
NameTimeRPMove% Move
JSE Overall17:0032140.01302.870.95%
JSE Top 4017:0028808.74293.801.03%
JSE Gold17:002594.7630.371.18%
JSE Financial17:0021679.16134.300.62%
JSE Industrial17:0031793.78302.650.96%
JSE Indust 2517:0026363.52271.761.04%
JSE Resource17:0057352.12620.761.09%
DJ Futures19:4611830.0056.000.48%
DJ Ind19:2711873.0550.250.43%
SP 50019:361285.865.600.44%
FTSE 10018:495896.2528.340.48%
All Ords07:384860.90-31.10-0.64%
NZSE 5006:263352.7213.440.40%
NameTimeRPMove% Move
Gold/R kg19:56305945-135-0.04%
Brent Crude19:5696.74.750.78%
Rand / Dollar19:597.0771-0.0007-0.01%
Rand / Pound19:5511.29370.06420.57%
Rand / Euro19:559.62570.08990.94%
Rand / NZD19:585.35830.01580.30%
Rand / AUD19:557.00950.01970.28%
Yen / Dollar19:5882.6900-0.2800-0.34%
Euro / Dollar19:550.7357-0.0067-0.90%
Dollar / Euro19:581.35860.01190.88%
Pound / Dollar19:550.6252-0.0035-0.56%

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Index Summary
Index NameRPMove% Move
Top 4028,808.74293.801.03%
Mid Cap42,325.45246.320.59%
Small Cap33,161.7525.210.08%
Resource 2057,352.12620.761.09%
Industrial 2526,363.52271.761.04%
Financial 158,211.3560.930.75%
Financial & Ind. 3029,787.49284.620.96%
All Share32,140.01302.870.95%
Oil & Gas 27,707.68347.911.27%
Mining 37,693.98398.391.07%
Gold Mining2,594.7630.371.18%
Platinum Mining83.10-1.09-1.29%
Oil & Gas Producers 14,897.91187.071.27%
Basic Materials 31,686.70312.401.00%
Chemicals 13,597.5882.760.61%
Forestry & Paper 13,205.955.930.04%
Industrial Metals 29,904.9362.170.21%
Industrials 29,570.73108.360.37%
General Industrials 77,354.17410.060.53%
Consumer Goods 26,059.00321.121.25%
Automobiles & Parts 2,853.22.000.00%
Household Goods149.0921.34%
Health Care 32,375.96232.280.72%
Beverages 82,217.591230.191.52%
Food Producers 48,780.85280.830.58%
Index NameRPMove% Move
Personal Goods 389.724.201.09%
Consumer Services 51,909.8694.840.18%
General Retailers 38,977.07498.461.30%
Travel & Leisure 4,138.76-8.83-0.21%
Media 84,556.63-492.14-0.58%
Support Services 2,625.68-21.66-0.82%
Telecommunications 62,513.941524.272.50%
Financials 21,679.16134.300.62%
Banks 40,926.41412.501.02%
Non-life Insurance 30,978.22-123.67-0.40%
Life Insurance 15,771.9286.210.55%
General Financial 2,368.07.330.01%
Technology 20,666.2695.550.46%
SHARIAH TOP40 3,246.72391.22%
FTSE/JSE SHARIAH ALL3,312.81371.14%
COAL MINING21,175.34-24-0.12%
FTSE JSE Fledgling 4,748.54-15-0.31%
FTSE/JSE Alt X 1,130.36-10-0.87%
RESOURCE 31,552.973421.09%
DIVIDEND PLUS174.0510.67%
FTSE/JSE RAFI 406,703.04590.89%
Capped Top 4014,963.131430.96%
Capped All Share16,153.171460.91%

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Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
26 Jan 2011CBHDecember 2010 (Interim)
28 Jan 2011HUDACONovember 2010 (Final)
31 Jan 2011CAPITALDecember 2010 (Final)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
FOORDCMPS11-01-2011-02-0411-02-14R 0.5385
DIALOGUE11-01-1311-02-1811-02-28R 0.1238
SBRJSEP1110-12-1511-03-0411-03-15R 1.4100
WINHOLD10-11-2911-02-1111-02-21R 0.1000
UCS10-11-2311-02-0411-02-14R 0.0500
Ex Div**
Share NameDec-DateLDTPay-DateAmount
ASTRAL10-11-1511-01-1411-01-24R 4.7000
REUNERT10-11-1711-01-1411-01-24R 2.2000
LEWIS10-11-0811-01-1411-01-24R 1.5600
CLICKS10-10-2111-01-2111-01-31R 0.7570
NETCARE10-11-1511-01-1411-01-24R 0.2750

Upcoming AGMs**
CodeCompany NameDateStatus
CVNConvergeNet Holdings Ltd21/01/2011Confirmed
BWIPB-W Instrumentation and Electrical Ltd21/01/2011Confirmed
BWIB-W Instrumentation and Electrical Ltd21/01/2011Confirmed
EFFEfficient Financial Holdings Ltd21/01/2011Confirmed
NTCPNetcare Ltd21/01/2011Confirmed

Stock Exchange News Service
21/01/201117:44GEN - General - Statement by Kansai Paint Co., Ltd. in response to the circular
21/01/201117:25OML - Old Mutual plc - FORM 8.3
21/01/201117:13 Quantum Property Group Limited - Changes to the board of Directors
21/01/201116:52NEDB - Nedbank Limited - Issue of share instalments
21/01/201116:29 Efficient Financial Holdings Limited - Results of Annual General Meeting
21/01/201116:26 Efficient Financial Holdings - Change of company secretary
21/01/201116:06 Coronation Fund Managers Limited - Dealings in securities by a director
21/01/201116:05 Coronation Fund Managers Limited - Dealings in securities by a director
21/01/201115:51 Ellies Holdings Limited - Dealing in securities
21/01/201115:43 Invicta Holdings Limited - Directors Dealing In Securities
21/01/201115:15 Royal Bafokeng Platinum Limited - Subscription of shares by the Mahube
21/01/201115:04 Marshall Monteagle Holdings Societe Anonyme - Dealing in securities by
21/01/201114:26 B & W Instrumentation and Electrical Limited - Results of annual general
21/01/201114:15 IFCA Technologies Limited - Successful conclusion of $100m equity facility
21/01/201114:11 Real Africa Holdings Limited - Renewal of Cautionary Announcement
21/01/201114:10SUI/GPL - Sun International/Grand Parade Investments Limited - Renewal of joint
21/01/201113:00 Blue Financial Services Limited- Confirmations received to convert r266.5m
21/01/201112:48 RBA Holdings Limited - Share options to minorities and employees
21/01/201112:45 Harmony Gold Mining Company Ltd - Press Release
21/01/201112:44 Cenmag Holdings Limited - Salient dates in respect of the change of name
21/01/201112:39 Convergenet Holdings Limited - Results of annual general meeting
21/01/201112:30 Verimark Holdings Limited - Trading Update
21/01/201112:12 Netcare Limited - Results of the annual general meeting
21/01/201111:46 Capitec Bank Holdings Limited - Transactions in securities by a director
21/01/201111:30SABIDI - Investec Bank - Amended announcement to warrant holders of the enhanced
21/01/201111:25 Paracon Holdings - No Change Statement and Notice of Annual General
21/01/201110:55 Tradehold Limited - Finalisation announcement relating to the proposed
21/01/201110:45 Premium Properties Limited - Rights Offer Finalisation Announcement
21/01/201110:12 Rockwell Diamonds Incorporated - Interim consolidated financial
21/01/201109:20CUL/CULP - Cullinan Holdings Limited - Appointment of director
21/01/201109:11SABIDI - Investec Bank Limited - Expiry of enhanced dividend securities
21/01/201109:00 African Eagle Resources plc - Placing to raise GBP3.7 million
21/01/201108:00 DRDGold Limited - DRDGold guidance for December 2010 quarter
21/01/201107:15 Lewis Group Limited - Sales and debtors` book update for the quarter and
21/01/201107:05 BHP Billiton Plc - Transaction In Shares

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