Bond yields reflect doubt about Andre de Ruyter heading Eskom

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Bond yields reflect doubt about Andre de Ruyter heading Eskom
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As the new CEO has no public-side experience, the market is not sure about him lasting long at Eskom, trader Michelle Wohlberg says

New Eskom CEO Andre de Ruyter. Picture: BLOOMBERG/WALDO SWIEGERS

De Ruyter, CEO of packaging company Nampak, has considerable corporate experience, though not at a utility. His appointment comes at a time when Eskom is undergoing a transformation that will require technical and financial knowledge as well as the ability to deal with the government and labour unions.

Yields on Eskom’s $1.75bn of securities due in 2021 climbed 32 basis points on Tuesday to 5.47%, the highest in almost eight weeks, after jumping 17 basis points on Monday. The yield spread of the 2021 notes over 2028 bonds narrowed 31 basis points in the two days.

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