Full Text Available
Note: Clicking the button above will open the full text document at the original institutional repository in a new window.
A critical assessment of the South African bond market
This paper looks at the experience of South Africa in the development of its local‐currency, so‐called domestic, bond market. Whilst South Africa had the deepest financial market in Sub‐Saharan Africa it also had one of the shallowest domestic bond markets, until 2009. This changed with the rapid bo...
Saved in:
| Main Author: | |
|---|---|
| Other Authors: | |
| Format: | Thesis |
| Language: | English |
| Published: |
Research of GSB
2018
|
| Subjects: | |
| Tags: |
No Tags, Be the first to tag this record!
|
| _version_ | 1867613775004172288 |
|---|---|
| access_status_str | Open Access |
| author | Sze, Winnie W Y |
| author2 | Biekpe, Nicholas |
| author_browse | Biekpe, Nicholas Sze, Winnie W Y |
| author_facet | Biekpe, Nicholas Sze, Winnie W Y |
| author_sort | Sze, Winnie W Y |
| collection | Thesis |
| description | This paper looks at the experience of South Africa in the development of its local‐currency, so‐called domestic, bond market. Whilst South Africa had the deepest financial market in Sub‐Saharan Africa it also had one of the shallowest domestic bond markets, until 2009. This changed with the rapid bond issuances by the national government as a means to fund its expanding government expenditure. The paper finds that the government issuances served to deepen the market for rand‐based bonds and lengthen the maturities of bonds, for the benefit of itself, state‐owned enterprises, and the private sector, particularly the banks. At the same time, it has heightened the risk of negatively impacting economic development. The World Bank and other multilaterals advocate the development of the domestic bond market as a financial cushion against financial stress and as a way to better channel domestic savings towards domestic investment. There is argument that South Africa's domestic bond market acts as a substitute and competition for the dominant bank market. At the same time, given the market infrastructure and regulation, there is also high risk that the bond market could act as a co‐contagion in the event of a bank crisis. There is no evidence that total savings improved as a result of the bond market, however the provision of a long‐term instrument more theoretically suitable to South Africa's specialist pension and insurance funds suggest that the market provides beneficial intermediation. The recommendations focus on mitigating the negative biases of market infrastructure supports and the pension fund regulation. |
| format | Thesis |
| id | oai:open.uct.ac.za:11427/28986 |
| institution | University of Cape Town (South Africa) |
| language | eng |
| last_indexed | 2026-06-10T12:41:30.188Z |
| license_str | Not specified — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from UCTD — University of Cape Town Open Access Repository |
| publishDate | 2018 |
| publishDateRange | 2018 |
| publishDateSort | 2018 |
| publisher | Research of GSB |
| publisherStr | Research of GSB |
| record_format | dspace |
| source_str | UCTD — University of Cape Town Open Access Repository |
| spelling | oai:open.uct.ac.za:11427/28986 A critical assessment of the South African bond market Sze, Winnie W Y Biekpe, Nicholas Development Finance This paper looks at the experience of South Africa in the development of its local‐currency, so‐called domestic, bond market. Whilst South Africa had the deepest financial market in Sub‐Saharan Africa it also had one of the shallowest domestic bond markets, until 2009. This changed with the rapid bond issuances by the national government as a means to fund its expanding government expenditure. The paper finds that the government issuances served to deepen the market for rand‐based bonds and lengthen the maturities of bonds, for the benefit of itself, state‐owned enterprises, and the private sector, particularly the banks. At the same time, it has heightened the risk of negatively impacting economic development. The World Bank and other multilaterals advocate the development of the domestic bond market as a financial cushion against financial stress and as a way to better channel domestic savings towards domestic investment. There is argument that South Africa's domestic bond market acts as a substitute and competition for the dominant bank market. At the same time, given the market infrastructure and regulation, there is also high risk that the bond market could act as a co‐contagion in the event of a bank crisis. There is no evidence that total savings improved as a result of the bond market, however the provision of a long‐term instrument more theoretically suitable to South Africa's specialist pension and insurance funds suggest that the market provides beneficial intermediation. The recommendations focus on mitigating the negative biases of market infrastructure supports and the pension fund regulation. 2018-11-02T09:31:38Z 2018-11-02T09:31:38Z 2016 Master Thesis Masters MCom http://hdl.handle.net/11427/28986 eng application/pdf Research of GSB Faculty of Commerce University of Cape Town |
| spellingShingle | Development Finance Sze, Winnie W Y A critical assessment of the South African bond market |
| thesis_degree_str | Master's |
| title | A critical assessment of the South African bond market |
| title_full | A critical assessment of the South African bond market |
| title_fullStr | A critical assessment of the South African bond market |
| title_full_unstemmed | A critical assessment of the South African bond market |
| title_short | A critical assessment of the South African bond market |
| title_sort | critical assessment of the south african bond market |
| topic | Development Finance |
| url | http://hdl.handle.net/11427/28986 |
| work_keys_str_mv | AT szewinniewy acriticalassessmentofthesouthafricanbondmarket AT szewinniewy criticalassessmentofthesouthafricanbondmarket |