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SOEs: Is the PIC in too deep?

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Johannesburg - The extent of the investment by the Public Investment Corporation (PIC) in the debt of state-owned enterprises (SOEs) has come under increased scrutiny amid the country’s downgrade to “junk” status, Transnet’s recent bond failures and fresh allegations of corruption.

The market for SOE bonds has swollen from R71 billion in 2007 to R243 billion last year, according to SA Reserve Bank data.

The PIC, on behalf of the Government Employees’ Pension Fund and smaller clients such as the Unemployment Insurance Fund, is by far the largest buyer of this debt.

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