GEPFFinancial Mail reports that the country’s largest investor in the bonds of SA’s beleaguered state-owned enterprises (SOEs) has drawn a line in the sand and is slowly withdrawing support for basket cases such as Eskom.  

That surprising detail came from the publication of the Government Employees Pension Fund (GEPF) annual report for the year ending March 2019, which showed that its exposure to SOEs fell by nearly 8% to R151.84bn while its overall portfolio remained flat at R1.8-trillion.  For years, the GEPF has been the single largest buyer of Eskom’s debt.  However, the fund’s exposure to Eskom’s bonds fell by 3.5% to R84.4bn during the course of the year.  While hardly seismic, the development is significant given the GEPF’s historical relationship with Eskom.  GEPF principal executive officer Abel Sithole was cagey when asked to explain this and said the fund was not actively selling down its holdings.  "We are letting the debt mature and simply not reinvesting," he indicated.  Until this year, the GEPF was a substantial net buyer of the utility’s debt.  The Public Servants Association (PSA) threatened to take the GEPF to court if it continued to increase its exposure.  "We are pleased that our threats have been heard.  No guarantor can stand behind the bonds when the guarantor is broke, and we know the government is broke.  So we would like the GEPF to sell off the bonds it owns in SOEs.  They will never be fixed as long as they have this piggy bank they can rely on," said the PSA’s Tahir Maepa.  Cosatu’s Matthew Parks agreed, saying no further support of SOEs should be forthcoming until the government came forward with clear plans to stop looting.

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