Chosen_One
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South African bonds advance - 2006/10/25 14:58
South African government bonds rose by the most in two weeks as the government halved the value of bonds its plans to sell this year after tax revenue surpassed its expectations.
The public sector, which includes state-owned companies, will probably borrow 21 billion rand ($2.8 billion) in the year through March 2007, down from a February estimate of 40.5 billion rand, the Treasury said in its mid-term budget in Cape Town today. Lower government borrowing may reduce the supply of debt.
The yield on the 13.5% bond due September 2015 fell 9 basis points to 8.41% at 3 p.m. in Johannesburg, from as high as 8.51 earlier. The price of the note, also known as the R157, gained 0.62, or 62 cents per 100 rand ($13.14) face amount, to 131.38. Bond yields move inversely to prices.
Tax revenue will probably total 486.4 billion rand in the current fiscal year, 29.6 billion rand more than targeted in February, as the economy expands and employment rises, the Treasury said today. That led Finance Minister Trevor Manuel to forecast the government's first budget surplus since at least 1960 for the next fiscal year.
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