Today's Big Stories

Ratings agencies cast doubt on governance at SOEs

Ratings agency Moody’s has warned that it could cut the ratings of five State-owned agencies (SOEs), including Eskom as a result of funding risks.

Moody’s placed Eskom, Sanral, the Industrial Development Corporation (IDC), the Land Bank and the Development Bank of Southern Africa (DBSA) under review.

It raised concerns over the decision by some local institutional investors to stop lending to parastatals.

Economist Dr Iraj Abidian explains that the prospects of cash flow from SOEs are not robust enough to give assurance to lenders and investors.

Asset manager Futuregrowth announced this month that they have cut lending to several State-run firms due to political uncertainty and governance issues.

Those who are running the institutions have, themselves, created doubt about their own credibility by being under a long string of political manipulations.

Dr Iraj Abidian, Economist at at Pan-African Capital Holdings

Listen to the full conversation from CapeTalk's Breakfast with Kieno Kammies:

At the same time, financial expert Sikonathi Mantshantsha warned against the the power struggle between President Jacob Zuma and Finance Minister Pravin Gordhan over spending at State-owned companies.

Zuma announced that he would have oversight over a newly formed presidential SOE coordinating council.

That means he would make all the decisions concerning these SOEs. It's like the fox guarding the chicken coup that we paid so many millions for at Nkandla.

Sikonathi Mantshantsha, Deputy Editor at Financial Mail

Listen to the full conversation from CapeTalk's Breakfast with Kieno Kammies:


This article first appeared on 702 : Ratings agencies cast doubt on governance at SOEs


Recommended

by NEWSROOM AI
Read More
'SOEs are failing because the board of directors are not competent'

'SOEs are failing because the board of directors are not competent'

Bruce Whitfield interviews former Denel CEO Shaun Liebenberg about the imminent downgrade of five State Owned Enterprises.

Hawks mounts pressure on Pravin, Zuma extends his powers over SOEs

Hawks mounts pressure on Pravin, Zuma extends his powers over SOEs

Pravin Gordhan's position might be weakened as Hawks summon him to Pretoria and Zuma reportedly extends his powers over SOEs.

SA credit ratings downgrade review by Moody's expected, says economist

SA credit ratings downgrade review by Moody's expected, says economist

Economist explains why ratings agency Moody's has placed South Africa on review for a downgrade. How do we avoid junk status?

Moody's places downgrade on South Africa on review

Moody's places downgrade on South Africa on review

Pravin Gordhan speaks to John Robbie from USA about Moody's decision to place SA downgrade on review.

How do we restore confidence in SOEs?

How do we restore confidence in SOEs?

Professor of Economics at North West University Business School, Raymond Parsons spoke to John about the state of parastatals.

Popular articles
[LISTEN]Tempers flare as Eusebius grills SABC's Maroleng about hiring and firing

[LISTEN]Tempers flare as Eusebius grills SABC's Maroleng about hiring and firing

Embattled public broadcaster's new COO, Chris Maroleng tries to defend SABC about Sakina Kamwendo incident.

'White South Africans learning an African language would show respect'

'White South Africans learning an African language would show respect'

A video of a white man speaking fluent TshiVenda went viral, but languages expert Dr Dowling says most black people speak English.

Water to be released from Berg River to Misverstand Dam to avoid Day Zero

Water to be released from Berg River to Misverstand Dam to avoid Day Zero

Government has put plans in place to prevent the Misverstand Dam from running dry in a week's time.

What Hashim Amla's fascinating story illuminates about South African society

What Hashim Amla's fascinating story illuminates about South African society

Writer Niren Tolsi says SA cricketer Hashim Amla is the living embodiment of a nation trying to express itself while healing.

Highly-criticised world athletics body's rule could end Caster Semenya's career

Highly-criticised world athletics body's rule could end Caster Semenya's career

She faces ongoing complaints from rivals about having an "unfair advantage" on the track, but how fair is this proposed IAAF rule?

Cape plumber designs device to ensure geyser water doesn't go down the drain

Cape plumber designs device to ensure geyser water doesn't go down the drain

Wattapac is a water-saving bladder and pump designed to help plumbers save as much as 1 000 litres of water a day.

Madiba’s private secretary Zelda la Grange opens up about money (hers and his)

Madiba’s private secretary Zelda la Grange opens up about money (hers and his)

Bruce Whitfield interviews La Grange about her and Madiba's attitude to money (hopes and fears, successes and failures, etc.)