STEPHEN CRANSTON: The thrill of bonds
A good look at the actual risks of these allegedly low-risk instruments is enough to get the adrenaline pumping
The highlight of the BDFM Investment Summit last week in Johannesburg was the talk on bonds. It may seem an unlikely topic to get the adrenaline pumping but it was delivered by Andrew Canter’s Futuregrowth. Canter was the first person to make bonds interesting to me, when there was just a smattering of nongovernment bonds from Transnet and Eskom. This was when Eskom was still considered a well-run business, proving to many that state enterprises could be efficient. A year ago Canter stopped making loans to all major state-owned enterprises, or buying their bonds. The lack of support from Futuregrowth’s controlling company, Old Mutual, was frankly disgraceful. Futuregrowth spelt out what it was thinking — and who can doubt it in this era of state capture, where SOEs’ reputations have sunk to even lower depths?Canter did not speak at our conference but his stand-in, Olga Constantatos, did. She is called the credit and equity process manager, so does most of the heavy lifting at the sh...
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