The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Banking

South Africa: Opening the Eurorand avenue

The World Bank's decision to open up its 25-year Eurorand offering for the third time late last month and the EIB's R100 million ($23 million) five-year deal are signs of renewed confidence in this nascent market. The next step in the market's maturing must be its use by local issuers, which is expected soon.

This would be a big step forward in the rebirth of South Africa's capital markets which have not been without their difficulties over the past few years.

The toughest of these was last year when the local capital market took a severe knock, mainly when foreign investors jumped out because of a weakness in the rand. Over the year the rand lost 30% in value, driving yields on five to 10 year issues to almost 16%. The currency volatility resulted in negative dollar returns on local rand-denominated bonds.

This had a knock-on effect. For instance the electricity utility Eskom, which had given notice that it was planning to do a Deutschmark issue, held back as it received indications there could be a penalizing spread.

But the falling rand also sparked a change in government policy. For many years the South African Reserve Bank was providing local borrowers on the foreign capital markets with forward cover against currency losses.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree