Friday, 04 May 2012 - 20:00
S.Africa rand falls vs dollar, dealers cover shorts
JOHANNESBURG (Reuters) - The rand lost more than 1 percent on Friday as investors covered short dollar positions on rising risk aversion and South African government bonds fell as an undersubscribed inflation-linked bond sale weighed on the market.
The rand hit the week's low in late trade, with dealers saying traders who had been short were buying back the dollar after a disappointing U.S. jobs report and data pointing to a deeper euro zone recession depressed demand for riskier emerging market assets.
Rand buying this week had driven the currency to one-month highs.
By 1503 GMT, the rand was at 7.8161, down 1.04 percent against the dollar.
"There was quite a lot of rand buying this week and as such the market is short covering, especially since it started to break up toward 7.80," said Brigid Taylor, a trader at Nedbank.
A weekly auction of inflation-linked bonds was well undersubscribed earlier in the session, surprising the market and the first time since January that the Treasury had failed to sell its planned amount of paper.
Only 390 million rand was taken up by investors, out of 800 million rand on offer.
Dealers said it was probably due to a lack of local players in the market because of public holidays in the last two weeks. A fixed-income auction on Wednesday had attracted foreign buyers but they do not feature heavily in the inflation-linked sales.
Yields on the fixed-income benchmarks rose, by 3 basis points to 6.375 percent on the three-year note and 8.095 percent on the 14-year issue.
"It's a consolidation, as well as the inflation-linked bond sale not being allotted in full this morning, that caused a little bit of nervousness in the vanilla bonds," said Marten Banninga of WWC Securities in Johannesburg, adding that the rand's weakness was also encouraging markets to consolidate.
Analysts are now looking to the next inflation-linked debt sale on Wednesday to confirm that the failed auction was merely unfortunate timing by the Treasury. Power-utility Eskom has offered 250 million rand in a 2028 inflation-linked bond.
"If that goes through at fairly decent levels then you'll see that there is still demand for linkers on the market," another trader said.
Fri, 04 May 2012
Total revenue increased to R1.9 billion (R1.7 billion). A loss attributable to shareholders of R511.3 million (profit of R170.8 million) was made. However, headline earnings per linked unit grew to 39.53c (35.91cplu).
An interim ordinary distribution of 31.5cplu has been declared.
Despite ongoing challenging market conditions, which affect the office properties sector in particular, Redefine's core property portfolio is anticipated to achieve continued growt. . .
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Latest Consensus Changes**
|INL||INVESTEC LIMITED||BUY||02 May|
|HPA||HOSPITALITY PROP FUND A||BUY||02 May|
|VPF||VUNANI PROP INV FUND LTD||BUY||02 May|
|REB||REBOSIS PROPERTY FUND LTD||BUY||02 May|
|Expected||Company Name||Fin. Date|
|08 May 2012||ALTRON||February 2012 (Final)|
|08 May 2012||ALTRON PP||February 2012 (Final)|
|09 May 2012||EASTPLATS||March 2012 (Q)|
|09 May 2012||EHSV||March 2012 (Q)|
|09 May 2012||HARMONY||March 2012 (Q)|
|NED||Nedbank Group Ltd.||04/05/2012||Confirmed|
|RNG||Randgold - Exploration Co Ltd.||04/05/2012||Confirmed|
|KIO||Kumba Iron Ore Ltd.||04/05/2012||Confirmed|
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