South African fund manager Futuregrowth lifts ban on state-run Land Bank’s debt

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JOHANNESBURG (Reuters) – South African fixed-income asset manager Futuregrowth has lifted a suspension on buying the bonds of state-run Land Bank subject to amendments, it said on Monday.

Futuregrowth, which manages client assets of around 170 billion rand ($12 bln), halted buying the debt of six state-owned firms (SOEs) – including power utility Eskom and logistics firm Transnet – last month, citing political uncertainty following investigations into Finance Minister Pravin Gordhan.

On Monday, it said its ban on buying the other five firms’ debt remained in place but it was in talks with the companies about the issue.

Its decision to lift its ban on buying the debt of Land Bank, a major lender to farmers, follows an “extensive review of the governance and investor protection mechanisms”, Futuregrowth said in a statement.

“Land Bank agreed to improve transparency and public disclosure of its governance structures within the organisation,” Futuregrowth said.

Another South African fund manager, Abax Investments, said this month that it had reduced purchasing bonds of state-owned firms in the past three years due to concerns over their weaker performance, but would not impose a blanket lending freeze.

Land Bank confirmed in a statement the lifting of Futuregrowth’s suspension with immediate effect.

“These enhancements are viewed in a positive light and have been welcomed by Land Bank,” it said.

“Futuregrowth continues to constructively engage with other SOEs as part of its ongoing investment process,” Futuregrowth spokeswomen Michele Usher said.



($1 = 13.6645 rand)


(Reporting by Tanisha Heiberg; Editing by Susan Fenton)

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