Steinhoff a disaster for South Africa

Investors may be quick to pass off Steinhoff’s collapse as an idiosyncratic corporate event, but the fall of one of South Africa’s biggest companies is a severe blow to a country struggling to cling on to its image.

  • By Sam Kerr, Virginia Furness
  • 07 Dec 2017
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South Africa is within reach of a brighter future. It has a chance to end president Jacob Zuma's regime that has seen the country fall from being Africa’s brightest economic prospect, and highest rated country, to a real point of concern, with rising debt, declining revenues and slowing growth. Not to mention weakening institutions and cronyism.

Elections for the leadership of the ruling African National Congress are looming. Cyril Ramaphosa offers a chance for change, but a return to Zuma-style politics could be the outcome of a win by Nkosazana Dlamini-Zuma. A final downgrade to junk by Moody’s is just as close.

South Africa could do with nothing else happening to further spook investors. Steinhoff’s decline will not help. Investors in South African bonds may claim they differentiate between credits but they clearly were not willing to take on risk from local property company Growthpoint this week, which had to shelve a new bond issue once Steinhoff hit the skids.

And the decline in share value of anything with the slightest Steinhoff connection must be worrying for those concerned about contagion.

The past two days could prove to be historic for South Africa's capital markets. Any investor who was using Steinhoff as a safe way to gain exposure to the country, despite its large international footprint, will almost certainly end the year with a bad taste in the mouth.

Steinhoff's tumble is undoubtedly a company-specific story. But it doesn’t take much to change market sentiment and the damage done will make life harder for every issuer from South Africa in 2018.

  • By Sam Kerr, Virginia Furness
  • 07 Dec 2017

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 30,363.50 109 7.56%
2 JPMorgan 27,423.07 94 6.82%
3 Goldman Sachs 27,365.68 53 6.81%
4 Barclays 25,009.79 63 6.22%
5 Deutsche Bank 22,679.02 69 5.64%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Mizuho 299.85 1 21.73%
1 ING 299.85 1 21.73%
1 Commerzbank Group 299.85 1 21.73%
1 BNP Paribas 299.85 1 21.73%
5 UBS 60.22 1 4.36%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Goldman Sachs 1,607.28 5 22.59%
2 Credit Suisse 1,301.65 4 18.30%
3 UBS 970.80 3 13.65%
4 BNP Paribas 522.35 4 7.34%
5 SG Corporate & Investment Banking 444.17 3 6.24%