Foreigners – fearful of SA’s spiralling debt – are dumping government bonds
Foreigners, fearful of South Africa’s rapidly growing debt mountain, are selling South African government bonds, despite the attractive yield.
Last week alone, offshore investors dumped R835 million of bonds on the market.
What does this mean?
The Money Show’s Bruce Whitfield interviewed Kevin Lings, Chief Economist at Stanlib Asset Management.
If you go back to 2018, that was the peak… Foreigners loved South African assets, particularly bonds…Kevin Lings, Chief Economist - Stanlib Asset Management
Foreigners held 42% of all government debt [at the start of 2018] … They were systematically accumulating more and more…Kevin Lings, Chief Economist - Stanlib Asset Management
Government finances have deteriorated in a very visible way… Foreigners own less than 30% of South African government bonds…Kevin Lings, Chief Economist - Stanlib Asset Management
We’re going to have to attract a less risk-averse investor… We’re going to have to show we’re systematically getting back on top of our finances…Kevin Lings, Chief Economist - Stanlib Asset Management
Listen to the interview in the audio below.
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