The South Africa debt capital market has grown exponentially over the last ten years with reported turnovers on fixed-income securities trading on the Johannesburg Stock Exchange escalating from below ZAR10 trillion (approx. US$961 billion) in 2004 to a record of almost ZAR23 trillion (approx. US$2.2 trillion) by the end of 2013. The South African debt market is liquid and well developed in terms of the number of participants and their daily activity with approximately ZAR25 billion (approx. US$2.4 billion) being traded daily. At the end of 2013, the Johannesburg Stock Exchange reported 1600 listed debt instruments having an aggregate nominal amount outstanding of ZAR1.8 trillion (approx. US$173 billion).

A significant portion of the debt listed on the Johannesburg Stock Exchange is placed by the South African government with other issuers including state-owned companies, corporates, banks and other African countries. South Africa is still facing a challenge in respect of the development of a secondary market liquidity in the corporate bond market. Despite 2013 being a relatively quiet year in the South African capital markets, there has been a steady increase in foreign investment in debt capital trading, indicating confidence in South Africa’s capital markets.

Author

Wildu du Plessis is a partner and head of Baker McKenzie's Banking & Finance Practice Group in Johannesburg. He also acts as the office's Africa Head. He represents and advises leading domestic and international financial institutions, private equity groups and corporates in connection with a wide range of financing transactions, acquisitions, restructurings, regulatory and general finance matters.

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