Cadiz Asset Management published an interesting article on the way forward for African Bank.
In 2014, the South African Reserve Bank (SARB) placed African Bank under curatorship following the largest bank and corporate default in South Africa’s financial market history.
After two years of uncertainty, African Bank resumed trading on 4 April 2016. This time around, the bank seems to be moving away from only targeting the unsecured lending segment of the market. It is offering a range of additional financial products and services, including a range of new bonds.
In light of the ongoing political and economic tension trigged by the ‘Nenegate’ fiasco that started in December 2015, we believe the sales of these bonds should initially exceed demand. However, once the bond spreads have widened to enable the market to clear, we believe these bonds might offer value.
Please click here to download the full article which you are also welcome to share with interested clients.