JPMorgan: Investors should buy Eskom bonds before South Africa budget

JPMorgan has encouraged investors to buy the bonds of South Africa’s Eskom ahead of the country’s Feb. 22 budget, which is expected to set out how much of the troubled energy utility’s debt the government is taking on.

“Eskom should now be considered an extension of the sovereign, and bonds should trade as such,” JPMorgan analyst Zafar Nazim wrote in a note to clients on Tuesday, upgrading Eskom’s 2028 government-guaranteed bonds to “overweight” and reiterating an overweight recommendation on the non-guaranteed 2023, 2025 and 2025 bonds.