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Cape Town - The market has overlooked Eskom for too long, which will affect the CPI and present a key risk to the SA government bond curve, according to emerging markets economist Peter Attard Montalto of Nomura.
“Eskom has continued to conduct load shedding intermittently,” he said on Tuesday. “In addition, there has been an increasing flurry of activity from the government on the energy crisis, the questionable suspension of senior management for an audit and S&P’s downgrade of Eskom last week.”
“None of this, it seems, has particularly phased sovereign markets or FX, both of which continue to be driven more by US rates/US dollar than domestic factors, or certainly by Eskom.
