CHRIS GILMOUR: Investor rep needed to challenge bond market status quo
An investor representative that would act in the interests of bondholders is strongly supported by those who want bond market transformation
Last week was the first of a two-parter on the state of SA’s bond market. I bemoaned its lack of progress in terms of transparency, efficiency and fair play. I looked at how the JSE has managed this platform for the past decade, after fighting quite fiercely to buy it from a mixed bunch of shareholders, including Mark Barnes’s Purple Capital and the New Zealand Stock Exchange. I looked at a key suggestion, being the proposed establishment of an investor representative that would act in the interests of bondholders, allow for the quick calling of bondholder meetings, especially important in the case of credit events such as defaults. This function is strongly supported by vocal bond market transformation proponents, such as the Association for Savings and Investment SA, and Andrew Canter, chief investment officer of Futuregrowth. Canter lists PPC, Umgeni, African Bank, Consolidated Infrastructure Group and Steinhoff as instances in which bondholders were not empowered to call a meet...
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