Banks fight moves to protect bond market investors, says Futuregrowth
Stringent listings requirements help safeguard equity shareholders, but there are divisions over how to strengthen the hand of investors in SA’s corporate bond market
SA’s banks are fighting “tooth and nail” against reforms that would help protect pension fund investors in the bond market, according to asset manager Futuregrowth. While shareholders in listed equities enjoy a raft of protections from stringent JSE listings requirements, investors in SA’s corporate bond market do not, despite the fact that the sector had as much as R880.9bn invested at the end of December 2018. That is set to change, however, following a series of consultations held by the JSE with bond issuers and arrangers, as well as investors. “There’s a presumption that listed instruments have a set of quality standards associated with them, but in the bond market it’s simply not true,” says Futuregrowth’s chief investment officer, Andrew Canter. “There are no meaningful standards of quality or investor protections and you can sell just about anything. It’s incredible. The JSE should be rightfully embarrassed about this as they have owned the bond market for over ten years."...
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