Perceptions on the outlook for the securitisation market in South Africa
Date
2018
Authors
Dhliwayo, Patience
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Abstract
The sophisticated financing technique, securitisation, was blamed for the global
financial crisis of 2007 -2008. After the crisis, the securitisation industry suffered
globally as the number of issuances dwindled. Today, the USA and Europe
securitisation markets have recovered as a result of support from the Central Banks,
but the securitisation market in South Africa has not experienced a similar trend. The
purpose of this research was to gather the views and opinions of key market
participants on the development of securitisations in South Africa.
This research, qualitative in nature, was conducted through semi-structured
interviews with market participants who included: originators, both bank and nonbank
lenders, arrangers, credit rating agencies, trustees and investors. The results
revealed that securitisation is an important financing technique and is still very useful
in the South African economy. The downward trend in securitisation activity that
began during the global financial crisis has somewhat continued because the market
faces a few constraints. The market participants identified the constraints to growth
as being the lack of education by investors on asset-backed securities, the
conservative approach by credit rating agencies, the outdated securitisation
regulations and the absence of a secondary market for securitisation paper. As long
as these issues are not addressed, the market participants do not expect growth in
securitisation activity.
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MBA Thesis
Keywords
Asset-backed financing -- South Africa. Securities -- South Africa. Financial services industry -- South Africa