A WEE DRAM
CHRIS GILMOUR: The dangerous and murky shark tank of SA’s listed bond market
The JSE has been reformed and stockbroker hooligans removed, but bond institutions lag behind
When I started off as a company research analyst in Diagonal Street in 1982, times were very different. There was a Red Room which hosted drinking from 11am; stock price manipulation was blatantly evident; lunches went on late into the evening; and the bond market did its own thing, functioning in illiquid and opaque conditions. While the equity platform of the JSE now demonstrates lauded international best practice, and the stockbroking fraternity has been “dehooliganised” our bond market continues to lag. Its weaknesses persist decades later and resistance to change is strong. As a reader, you may not think the long-standing shortcomings of the institutional bond market are relevant to you — but take a look at your balanced portfolios and pension pots. Who of you weren’t somehow invested in African Bank or Steinhoff debt as they trundled towards failure, as well as state-owned entity (SOE) bonds such as Eskom, Transnet or Umgeni Water while they were severely mismanaged? As bond...
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