<div style="max-width: 700px;"><video-js data-account="1571595826001" data-player="default" data-embed="default" controls="" data-video-id="6114538927001" data-playlist-id="" data-application-id="" class="vjs-fluid"></video-js></div>
<script src="https://players.brightcove.net/1571595826001/default_default/index.min.js"></script>
Rating’s agency Moody’s has changed its 2020 outlook for African banks to negative from stable. This is due to the banking sector being hit by weakening African markets. Joining CNBC Africa for more is Constantinos Kypreos, Senior vice-President at Moody&#8217;s.

Moody’s: African banks hit with weakening African environment

<div style="max-width: 700px;"><video-js data-account="1571595826001" data-player="default" data-embed="default" controls="" data-video-id="6114265472001" data-playlist-id="" data-application-id="" class="vjs-fluid"></video-js></div>
<script src="https://players.brightcove.net/1571595826001/default_default/index.min.js"></script>
Research institute, Moody’s, says Nigeria’s debt affordability will remain weak and the country’s revenue is expected to remain low at around 8 per cent of Gross domestic product (GDP) until 2022. Meanwhile, oil producer club, Organization of the Petroleum Exporting Countries (OPEC) and its allies have agreed to an additional 500,000 barrel supply cut beginning from the first of January. Victor Aluyi, Head of Portfolio Management at Comercio Partners joins CNBC Africa for more.

Moody’s: Nigeria’s debt affordability will remain weak

<div style="max-width: 700px;"><video-js data-account="1571595826001" data-player="default" data-embed="default" controls="" data-video-id="6113333433001" data-playlist-id="" data-application-id="" class="vjs-fluid"></video-js></div>
<script src="https://players.brightcove.net/1571595826001/default_default/index.min.js"></script>
Rating agency, Moody’s has changed its outlook on the government of Nigeria’s ratings to negative from stable. Moody&#8217;s says the negative outlook reflects its view of increasing risks to Nigeria’s fiscal strength and external position. Kayode Akindele, Partner at TIA Capital joins CNBC Africa to discuss stories making headlines in Nigeria.

Moody’s changes outlook on Nigeria’s B2 rating from stable to negative

By Kopano Gumbi, CNBC Africa reporter 



South Africa has a plan to deal with the slow pace of economic reforms many South Africans complain about and <a href="https://www.cnbcafrica.com/zdnl-mc/2019/11/01/moodys-changes-sas-outlook-from-stable-to-negative/"> Moody’s</a> cited as one of the reasons it recently put the county on a negative outlook.



This was revealed by South Africa’s President Cyril Ramaphosa in an exclusive interview with CNBC Africa, watch the full interview below.


 
 



“On the reforms side we are making tremendous progress,” the President told CNBC Africa. 



The country was put on negative outlook by Moody’s on Friday
listing the slow pace of reforms as one of the main reasons it changed its
outlook.



“Moody&#8217;s decision to change the outlook to negative from
stable reflects the material risk that the government will not succeed in
arresting the deterioration of its finances through a revival in economic
growth and fiscal consolidation measures.” Ramaphosa differed, telling CNBC
Africa that he would be announcing enormous reforms during his investment
conference. The second instalment of the South Africa Investment conference
starts on Wednesday, 6 November and the goal is to raise another R300 billion. 



<iframe loading="lazy" width="560" height="315" src="https://www.youtube.com/embed/zt5JcPaP0iU" frameborder="0" allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe>



He acknowledged the impatience among South Africans at the
pace of reforms but said he is also very impatient and feels the heat and that
is why he is setting up structures that will get the country up to the speed
that people want.



It is going to be a tough sell, given the slew of bad news of
late.



Nearly two years into the job with a pledge to reform and
create growth, Ramaphosa is struggling to do both.&nbsp; South Africa’s GDP is expected to be a <a href="https://www.cnbcafrica.com/zdnl-mc/2019/10/30/mtbps2019-low-growth-high-spend-continues-to-plague-sa-economy-but-saa-eskom-get-more-funds/">paltry
0.5 percent this year</a>, while the country’s debt to GDP grows and state
owned entities are in shambles.



The President has an uphill battle to convince investors
that his cabinet is doing enough, and fast enough, to put their money behind
team South Africa. Security of energy supply is vital to the economic
development of the country and is often brought up as a worry for international
investors. Eskom remains a recurring pain point for the government.



The Minister of Public Enterprises, Pravin Gordhan, <a href="https://www.cnbcafrica.com/videos/2019/10/29/pravin-gordhan-unveils-eskoms-turnaround-plan/">recently
released the roadmap for Eskom</a>, a working document that aims to address
many of the challenges the power utility faces. It has also received billions
in bailouts in order to remain a going concern. Despite the utility being “too
big to fail,” systemic destruction of the institution has left it with problems
that may be harder to fix than a poor balance sheet. 



And although reforms for the entity have been tabled, the
negotiations to see them through are ongoing. Particularly with the labour
unions that are adamant that a revised Eskom cannot come at the expense of its
members. In a country with an unemployment rate at 29.1 percent and very low
likelihood that those looking will find work, it is expected that the unions
would be concerned. 



Labour laws 
Investors hold a different concern about labour in South Africa&#8211; they’re
worried about what they see as the country’s stringent labour laws. President Ramaphosa
says he is willing to listen to those who present obvious issues that impede
the employment of people.



“I have often asked what are those labour laws that people
would highlight as preventing more employment to be created,” said President Ramaphosa
when asked if he would consider revising the laws as a way of increasing
employment. “No-one has really been able to tell me definitely—the one they
have raised of late is the national minimum wage,” Ramaphosa continued. 



There is no shortage of plans, the president and his cabinet
have gone to great pains to outline plans, but execution is where the nation’s
leaders currently fall short. Whether they can demonstrate greater action is
yet to be seen. The country has just over three months until the next Moody’s
review happens. 



“We must get everyone to look at a shared future which is beneficial to all,” Ramaphosa encouraged, “not only to sectional interests.”

Ramaphosa on tackling unemployment

SA has a plan to reform at a faster pace: President Ramaphosa

<div style="max-width: 700px;"><video-js data-account="1571595826001" data-player="default" data-embed="default" controls="" data-video-id="6100304880001" data-playlist-id="" data-application-id="" class="vjs-fluid"></video-js></div>
<script src="https://players.brightcove.net/1571595826001/default_default/index.min.js"></script>
South Africa became world champions as they took home gold in the rugby world cup. The win took place a few hours after Moody’s changed the outlook on South Africa’s credit ratings to negative from stable. So what do this weekend’s events mean for brand South Africa? CNBC Africa’s Karabo Letlhatlha spoke to Jeremy Sampson, Executive Director, Brand Finance Africa.

What the #Springboks’ #RWC2019 win means for brand SA

<div style="max-width: 700px;"><video-js data-account="1571595826001" data-player="default" data-embed="default" controls="" data-video-id="6100280542001" data-playlist-id="" data-application-id="" class="vjs-fluid"></video-js></div>
<script src="https://players.brightcove.net/1571595826001/default_default/index.min.js"></script>
On the back of Moody&#8217;s credit rating for South Africa changing from stable to negative, CNBC Africa is joined by Annabel Bishop, Chief Economist at Investec to unpack what this means for the economy.

What does Moody’s negative outlook mean for SA’s economy?

By Moody&#8217;s 



Moody&#8217;s Investors Service (&#8220;Moody&#8217;s&#8221;) has today changed the outlook on the Government of South Africa&#8217;s ratings to negative from stable and affirmed the Baa3 long-term foreign-currency and local-currency issuer ratings.



Moody&#8217;s also affirmed South Africa&#8217;s Baa3 long-term foreign-currency and local-currency senior unsecured debt ratings, its (P)Baa3 senior unsecured medium-term note (MTN) and Shelf foreign-currency ratings, as well as its (P)P-3 short-term foreign-currency Other Short Term rating. In a related decision, Moody&#8217;s changed the outlook to negative from stable on ZAR Sovereign Capital Fund Propriety Limited&#8217;s rating and affirmed its Baa3 foreign-currency backed senior unsecured debt rating. ZAR Sovereign Capital Fund Propriety Limited is a special purpose vehicle whose debt issuance is ultimately the obligation of the South African government.



Moody&#8217;s decision to change the outlook to negative from stable reflects the material risk that the government will not succeed in arresting the deterioration of its finances through a revival in economic growth and fiscal consolidation measures. The challenges the government faces are evident in the continued deterioration in South Africa&#8217;s trend in growth and public debt burden, despite ongoing policy responses.



While high unemployment, income inequality and the social and political challenges they imply for policymakers are long-standing features in South Africa, the obstacles that they pose to the government&#8217;s plans to raise potential growth and contain fiscal deficits are proving more severe than expected a year ago. Acute financial stress for state-owned enterprises (SOEs), in particular Eskom Holdings SOC Limited (Eskom, B2 negative), continues to require sizeable ongoing support from the government. The development of a credible fiscal strategy to contain the rise in debt, including in the 2020 budget process and statement, will be crucial to sustain the rating at its current level.



The Baa3 rating affirmation takes into account the country&#8217;s deep, stable financial sector and robust macroeconomic policy framework, set against ongoing challenges related to weak potential growth and strong fiscal pressures.



South Africa&#8217;s long-term local-currency bond and bank deposits ceilings remain unchanged at A2, and the long-term and short-term foreign-currency bond ceilings are also unchanged at A3/Prime-2. The long-term foreign-currency bank deposits ceilings remain at Baa3, while the short-term foreign-currency bank deposits ceiling remains at Prime-3.



RATINGS RATIONALE



RATIONALE FOR CHANGING THE OUTLOOK TO NEGATIVE FROM STABLE



LOWER GROWTH FORECASTS REFLECT DEEPLY ENTRENCHED CONSTRAINTS ON GROWTH AND REFORM



Socio-economic features in South Africa including structurally high unemployment and income and wealth inequality are longstanding and deeply-entrenched constraints on the country&#8217;s growth potential. Deep inequalities &#8212; South Africa&#8217;s income inequality is among the highest globally, as measured by the Gini index &#8212; and resistance to reforms from key stakeholders limit the government&#8217;s room to adopt and implement structural reforms.



In the last two years, it has become increasingly apparent that those constraints are challenging the government&#8217;s ability to implement reforms that would durably lift growth, to an even greater extent than previously expected. Moody&#8217;s has revised down its medium-term growth projections to 1-1.5%, barely in line with population growth, from earlier expectations of a gradual pick-up towards 2.5-3%.



Job creation remains a central problem, with unemployment at a multi-year high of 29% in the third quarter of 2019. Gross fixed capital formation has been contracting on a year-on-year basis since the second quarter of 2018, as private companies see limited prospects of an improvement in the business environment. Productivity, the level of output per worker, has remained stagnant, in contrast with the steady, even if sometimes limited, growth seen in other countries at similar income levels.



The government has promoted a number of initiatives in response to these long-diagnosed issues. However, its ability to implement those initiatives in a way which generates broadly-based sustainable growth has faced obstacles in part from outstanding vested interests, in part from the social and political challenge of imposing measures that are initially likely to be detrimental for parts of the population. For instance, while the new mining charter has finally been introduced, it is unlikely to boost the sector&#8217;s investment, with regulatory uncertainty persisting amid ongoing appeals against some provisions of the charter. The government has also introduced multiple initiatives in the labour market including the Youth Employment Service programme, but none on a scale likely to materially increase employment. Other politically and socially sensitive reforms such as land reform have seen slow progress given the government&#8217;s need to balance the social and political objective of allowing land restitution, including through expropriation without compensation, and the economic objective of preserving investor confidence.



The negative outlook signals in part Moody&#8217;s rising concern that the government will not find the political capital to implement the range of measures it intends, and that its plans will be largely ineffective in lifting growth.



STRONG, WIDE-SPREAD FISCAL PRESSURES LEAVE GOVERNMENT DEBT ON AN UPWARDS TRAJECTORY



Low growth is exacerbating the pressures on South Africa&#8217;s fiscal position. The government debt burden has risen further than was expected a year ago and will rise still more in the coming years.



South Africa is one of the few countries globally where the average interest rate on government debt markedly exceeds &#8212; by an estimated 3 percentage points in fiscal year 2018 &#8212; nominal GDP growth. Given that condition, the government debt-to-GDP ratio will continue rising unless the government is able to generate large primary surpluses. The likelihood that it is able to do so has fallen materially.



The above-inflation wage indexation agreement, which runs until fiscal 2020 (ending on 31 March 2021), continued transfers to SOEs including the planned capital support for Eskom, and a fast-growing interest bill limit the scope for spending restraint. Meanwhile, acute financial stress for certain SOEs, including but not only Eskom, point to likely ongoing sizeable transfers and broader contingent liabilities for the foreseeable future.



As a result, scope for spending restraint is mainly in relation to purchases of goods and services (15% of total government spending) and a reduction in headcount numbers in the public sector, most likely through natural attrition.



On the revenue side, Moody&#8217;s expects that tax collection performance will improve over the medium term as the South African Revenue Service&#8217;s efforts to improve tax compliance yield some results, with taxes increasing at a faster pace than nominal growth from 2021 onwards. Over the near term, however, tax revenues have underperformed budget targets in fiscal 2018 and the 2019 main budget execution for the first six months suggests that this will be once again the case for full fiscal year 2019.



In the absence of any further policy response, the combination of rising expenditures and underperforming revenues will cause the fiscal deficit to widen to 6%-6.5% of GDP over 2019-22, from around 4% over 2015-18. Government debt will continue to rise to around 70% of GDP by end of fiscal year 2022, from 57% as of end of fiscal 2018. Taking into account the 7.5% of GDP in government guarantees to SOEs that Moody&#8217;s includes in the government debt perimeter from fiscal 2019 onwards, debt will approach 80% of GDP at the end of fiscal 2022 and remain on a rising trajectory. In Moody&#8217;s view, the combination of low potential growth and high and inexorably rising debt as outlined in the Medium Term Budget Policy Statement (MTBPS) published this week would not be consistent with a Baa3 rating. The current rating rests on the government&#8217;s ability to quickly develop a credible strategy to halt and ultimately reverse the rise in debt.



Such a strategy has not been forthcoming to date. The MTBPS represents a further step towards developing one. It broadly quantifies the ZAR150 billion (3% of 2019 GDP) additional cost saving measures that will be needed to balance the main budget net of interest and support to Eskom by fiscal 2022, its fiscal target, and stabilise government debt. It does not yet identify what those measures will be, other than that they will focus on containing the public sector wage bill. The MTBPS also reiterates that additional operational and financial reforms will be needed to curb the drain on public finances from Eskom and SOEs in general. In short, this week&#8217;s announcements do not yet represent a developed, credible fiscal strategy. The development of a credible fiscal strategy to contain the rise in debt, including in the 2020 budget process and statement, will be crucial to sustain the rating at its current level.



RATIONALE FOR AFFIRMING THE RATINGS AT Baa3



The Baa3 rating reflects South Africa&#8217;s deep, stable financial sector, resilience to a prolonged period of low growth, and a robust macroeconomic policy framework. The South African Reserve Bank has a demonstrated track record in implementing credible and effective monetary policy and preserving financial stability. Moreover, the government remains committed to fighting the so-called &#8220;state capture&#8221;, even though the process will take time to gain legitimacy and show results in improved institutions and business environment.



Balancing these relative strengths, South Africa&#8217;s institutions continue to be tested by weak growth and strong fiscal pressures.



ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS



Social considerations are material for South Africa&#8217;s credit profile and their implications for the economy and public finances are a driver of the negative outlook. Deep socio-economic inequalities complicate the implementation of reforms which would otherwise unlock the economy&#8217;s potential, and contribute to tensions that fuel latent political risk .



Governance considerations are material to South Africa&#8217;s credit profile. South Africa&#8217;s ranking under the Worldwide Governance Indicators is in line with that of Baa3-rated sovereigns, and the strength of key institutions, in particular the South African Reserve Bank and the Treasury, continue to support the rating. Set against those qualities, the broader erosion in institutional strength induced by the corruption of the Zuma administration is an important factor behind the erosion in South Africa&#8217;s credit profile in recent years. The legacy that era has bequeathed of poor governance of SOEs, and of Eskom in particular, remains a key drain on fiscal resources and also weighs on South Africa&#8217;s fiscal strength.



Due to its geographical location, South Africa is subject to frequent climate-related shocks such as droughts, which undermine the agricultural sector&#8217;s performance and have weighed on growth in recent years. That said, the country&#8217;s economic diversification and sophisticated agricultural techniques mitigate the impact of environmental considerations on South Africa&#8217;s credit profile.



WHAT COULD CHANGE THE RATING UP



A rating upgrade is very unlikely in the near future. Moody&#8217;s would likely change the rating outlook to stable if it were to conclude that the government will succeed in stabilizing its debt ratios over the medium term, by reining in expenditures, improving tax compliance and by lifting potential growth.



Moody&#8217;s will have regard to a number of factors in this respect, including the government&#8217;s progress early on in its tenure in delivering the additional fiscal adjustments which the MTBPS identifies are needed, but also in addressing long-standing issues related to corruption and the financially weak SOEs sector, and in particular at Eskom. If achieved, these should ultimately enhance business confidence and private sector investment prospects.



WHAT COULD CHANGE THE RATING DOWN



South Africa&#8217;s ratings would likely be downgraded were Moody&#8217;s to conclude that those conditions will not be met and that South Africa&#8217;s fiscal and/or economic strength will continue to erode. Ultimately, this conclusion would likely reflect diminishing prospects that growth will be sufficient to preserve current income levels for the majority and halt the rise in government debt over the medium term. Signs of diminishing resilience to external financing shocks would also exert downwards pressure on the rating.



More immediately, a decision to downgrade the rating would reflect growing clarity that the government will not be able to further develop and implement its fiscal and economic strategy to halt and ultimately reverse the debt trajectory. The 2020 budget in particular will be a key indication in Moody&#8217;s view of whether or not the government is committed to the fiscal consolidation recommended by the MTBPS.



GDP per capita (PPP basis, US$): 13,630 (2018 Actual) (also known as Per Capita Income)



Real GDP growth (% change): 0.8% (2018 Actual) (also known as GDP Growth)



Inflation Rate (CPI, % change Dec/Dec): 4.4% (2018 Actual)



Gen. Gov. Financial Balance/GDP: -4.2% (2018 Actual) (also known as Fiscal Balance)



Current Account Balance/GDP: -3.5% (2018 Actual) (also known as External Balance)



External debt/GDP: 47% (2018 Actual)



Level of economic development: Moderate level of economic resilience



Default history: At least one default event (on bonds and/or loans) has been recorded since 1983.



On 31 October 2019, a rating committee was called to discuss the rating of the Government of South Africa. The main points raised during the discussion were: The issuer&#8217;s economic fundamentals, including its economic strength, have not materially changed. The issuer&#8217;s institutional strength/ framework, have not materially changed. The issuer&#8217;s fiscal or financial strength, including its debt profile, has materially decreased. The issuer has become increasingly susceptible to event risks.



The principal methodology used in these ratings was Sovereign Bond Ratings published in November 2018. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.



The weighting of all rating factors is described in the methodology used in this credit rating action, if applicable.



REGULATORY DISCLOSURES



For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody&#8217;s rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider&#8217;s credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.



For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Moody’s changes SA’s outlook from stable to negative

<div style="max-width: 700px;"><video-js data-account="1571595826001" data-player="default" data-embed="default" controls="" data-video-id="6099772483001" data-playlist-id="" data-application-id="" class="vjs-fluid"></video-js></div>
<script src="https://players.brightcove.net/1571595826001/default_default/index.min.js"></script>
The Absa Purchasing Managers Index lifted from a revised 45.1 points in September to 48.1 points in October. This sets the tone for how manufacturers in the sector view the month ahead. Joining CNBC Africa to discuss this further and whether Moody&#8217;s will downgrade South Africa is Absa Senior Economist, Miyelani Malueke.

Will Moody’s throw SA over the precipice?

JOHANNESBURG &#8211; South Africa’s rand firmed on Friday as an unexpected bounce in Chinese factory activity helped offset concerns over prospects of a U.S.-China trade pact and skittishness ahead of a long-awaited decision on South Africa’s credit rating.



The rand traded at 15.0600 versus the greenback by 0505 GMT, 0.31% stronger compared with the previous day’s close.



The currency had been losing ground following a bleak budget speech on Wednesday, where Finance Minister Tito Mboweni slashed growth forecasts and predicted ballooning debt.



That raised fears that South Africa could lose its last investment-grade credit rating on Friday, when Moody’s is set to announce its ratings decision following a review, also knocking confidence in the rand.



However, investor sentiment was given a boost on Friday after a survey showed that manufacturing activity in China expanded at its fastest pace in more than two years in October, lifting Asian shares.



Throughout the day, though, the rand is likely to be driven by Moody’s decision. Peregrine Treasury Solutions said in a note there was no telling the impact a negative adjustment in its rating could have: “For now, it’s just sit back and hold tight, with a new support level of R15.00 having been set.”



Government bonds inched lower, with the yield on benchmark 2026 instrument rising 1 basis point to 8.505%.



Reporting by Emma Rumney; Editing by Aditya Soni

Unexpected bounce in Chinese factory activity lifts South African rand ahead of Moody’s review

JOHANNESBURG (Reuters) &#8211; South Africa’s economic growth is unlikely to reach the treasury’s target of 1.5% in 2019 because conditions have changed and the country is facing increasing headwinds, Finance Minister Tito Mboweni said on Friday.



This week ratings agency Moody’s, the last of the top three credit firms to rate South Africa’s debt at investment level, said it had lowered its growth forecast to 0.7% from 1%.



The central bank sees gross domestic product at 0.6% this year.



Both have cited slow economic reforms as the key drag on economic activity, and massive bailouts to state-owned companies, including 59 billion rand ($4.05 billion) to power firm Eskom.



This has limited the government’s scope for stimulus and raised debt while the resultant uncertainty has kept investment subdued.



“The assumptions underlying the forecasts have clearly changed &#8230; the actual deficit now is probably much higher,” Mboweni told a banking conference in Johannesburg.



He said that increasing calls for the treasury to bail out state firms was putting pressure on growth and spending.



“We must re-focus our economy on agriculture …but we also have to continue to support Eskom, because without electricity there is no growth,” Mboweni said.



A Reuters poll of economists this week forecast South African economic growth at 0.7% this year, up from 0.6% in the previous forecast. Second quarter growth bounced back 3.1% after a revised contraction of 3.1% in the first quarter.



($1 = 14.5521 rand)



Reporting by Mfuneko Toyana; editing by Andrew Heavens and Jason Neely

South Africa’s is likely to miss 1.5% growth target, here’s why

<div style="max-width: 700px;"><video-js data-account="1571595826001" data-player="default" data-embed="default" controls="" data-video-id="6084936534001" data-playlist-id="" data-application-id="" class="vjs-fluid"></video-js></div>
<script src="https://players.brightcove.net/1571595826001/default_default/index.min.js"></script>
Credit ratings agency Moody’s is the last to keep South Africa at investment grade. But structural factors like government debt, the state of our state owned enterprises and the ESG risks present an ongoing challenge. Lucie Villa, Lead Sovereign Analyst at Moody’s spoke to CNBC Africa&#8217;s Kopano Gumbi on the back of their sub-Saharan Africa Summit.

Moody’s says SA still at risk of downgrade

(Reuters) &#8211; South Africa’s rand was flat early on Monday, holding on to its brief recovery from last week as traders and investors continued to weigh heightened global growth risks against local uncertainty.



At 0740 GMT the rand was 0.1% weaker at 15.3050 per dollar versus a close of 15.2900 on Friday in New York, treading water as risk aversion linked to fears of slowing global growth and a crisis in Argentina lured investors to safe-haven assets.



The rand has fallen more than 6% since the beginning of August, pressured by the rising likelihood of a credit ratings downgrade by Moody’s linked to a massive, additional bailout for state power firm Eskom and signs of slower global growth.



The inversion of the U.S. Treasury bond yield curve &#8211; widely viewed as a sign of looming global recession &#8211; for the first time since 2007, also put pressure on the rand last week, but by Thursday some short-covering had seen it pullback from 11-month lows.



Traders said the rand is likely to remain in a narrow range ahead of Wednesday’s release of local consumer price inflation for July, with the rand’s attraction as a carry yield target the key focus.



Bonds were a touch weaker, with the yield on the benchmark paper due in 2026 adding 0.5 basis points to 8.39%.



Reporting by Mfuneko Toyana; Editing by Toby Chopra

South Africa’s rand flat as investors weigh heightened local, global risks, what you need to know

JOHANNESBURG (Reuters) &#8211; South Africa’s state power utility Eskom urgently needs a turnaround plan as its capital structure is unsustainable, credit ratings agency Moody’s said on Tuesday in a report which sent the rand lower.



“The company’s operational and financial performance has deteriorated, indicating the extent of the challenges facing Eskom in meeting its debt obligations absent government support,” Moody’s said in a note.



Eskom reported a mammoth 20.7 billion rand ($1.39 billion) annual loss a week ago. [nL8N24V5CB]



($1 = 14.9196 rand)



Reporting by Alistair Smout; Editing by Jan Harvey

South Africa’s state power utility Eskom urgently needs turnaround plan – Moody’s

<div style="max-width: 700px;"><video-js data-account="1571595826001" data-player="default" data-embed="default" controls="" data-video-id="6063931602001" data-playlist-id="" data-application-id="" class="vjs-fluid"></video-js></div>
<script src="https://players.brightcove.net/1571595826001/default_default/index.min.js"></script>
Rating agency Moody’s has warned that the tabling of an appropriation bill in parliament to give Eskom an extra R59 billion of government support by finance minister Tito Mboweni is “credit negative” for the sovereign as it is a further drain on fiscal resources. Moody’s is the last of the three big international ratings agencies to have South African debt at investment grade. CNBC Africa spoke to author of this report Lucie Villa, Moody’s Lead Sovereign Analyst for South Africa.

Moody’s: Here’s how the Eskom govt bailout will impact SA’s rating

<div style="max-width: 700px;"><video-js data-account="1571595826001" data-player="default" data-embed="default" controls="" data-video-id="6063836219001" data-playlist-id="" data-application-id="" class="vjs-fluid"></video-js></div>
<script src="https://players.brightcove.net/1571595826001/default_default/index.min.js"></script>
Rating agency Moody’s has warned that the tabling of an appropriation bill in parliament to give Eskom an extra R59 billion of government support by Finance Minister Tito Mboweni is “credit negative” for the sovereign as it is a further drain on fiscal resources. Moody’s is the last of the three big international ratings agencies to have South African debt at investment grade. Cobus Potgieter, Director at AIP Capital Management joins CNBC Africa to give analysis.

Moody’s warns SA over Eskom funding

<div style="max-width: 700px;"><video-js data-account="1571595826001" data-player="default" data-embed="default" controls="" data-video-id="6062662754001" data-playlist-id="" data-application-id="" class="vjs-fluid"></video-js></div>
<script src="https://players.brightcove.net/1571595826001/default_default/index.min.js"></script>
Kenya seeks to address its infrastructure needs of almost $4billion per year and according to Moody’s report on the country’s infrastructure sector, the private sector has a key role to play. Christopher Bredholt, vice President and Infrastructure Analyst at Moody’s joins CNBC Africa for more.

Private sector urged to play key role in Kenya’s infrastructure drive

<div style="display: block; position: relative; max-width: 730px;">
<div style="padding-top: 56.25%;"><iframe style="width: 100%; height: 100%; position: absolute; top: 0px; bottom: 0px; right: 0px; left: 0px;" src="//players.brightcove.net/1571595826001/default_default/index.html?videoId=6049524824001" allowfullscreen="" border=0 frameborder=0></iframe></div>
</div>
Moody&#8217;s Investors Service says the 5.4 per cent quarter-on-quarter decline in Nigeria&#8217;s gross federally collected revenues underscores the challenges the government faces in implementing the reform agenda to lower the dependence on oil. Aurelien Mali, Vice President, and Sovereign Analyst at Moody’s joins CNBC Africa assess some key credit challenges facing Nigeria.

Moody's

Moody’s: African banks hit with weakening African environment

Moody’s: Nigeria’s debt affordability will remain weak

Moody’s changes outlook on Nigeria’s B2 rating from stable to negative

SA has a plan to reform at a faster pace: President Ramaphosa

What the #Springboks’ #RWC2019 win means for brand SA

What does Moody’s negative outlook mean for SA’s economy?

Moody’s changes SA’s outlook from stable to negative

Will Moody’s throw SA over the precipice?

Unexpected bounce in Chinese factory activity lifts South African rand ahead of Moody’s review

South Africa’s is likely to miss 1.5% growth target, here’s why

Moody’s says SA still at risk of downgrade

South Africa’s rand flat as investors weigh heightened local, global risks, what you need to know

South Africa’s state power utility Eskom urgently needs turnaround plan – Moody’s

Moody’s: Here’s how the Eskom govt bailout will impact SA’s rating

Moody’s warns SA over Eskom funding

Private sector urged to play key role in Kenya’s infrastructure drive

Assessing Nigeria’s key credit challenges

News Tips

Advertise With Us

Moody's

Moody’s: African banks hit with weakening African environment

Moody’s: Nigeria’s debt affordability will remain weak

Moody’s changes outlook on Nigeria’s B2 rating from stable to negative

SA has a plan to reform at a faster pace: President Ramaphosa

What the #Springboks’ #RWC2019 win means for brand SA

What does Moody’s negative outlook mean for SA’s economy?

Moody’s changes SA’s outlook from stable to negative

Will Moody’s throw SA over the precipice?

Unexpected bounce in Chinese factory activity lifts South African rand ahead of Moody’s review

South Africa’s is likely to miss 1.5% growth target, here’s why

Moody’s says SA still at risk of downgrade

South Africa’s rand flat as investors weigh heightened local, global risks, what you need to know

South Africa’s state power utility Eskom urgently needs turnaround plan – Moody’s

Moody’s: Here’s how the Eskom govt bailout will impact SA’s rating

Moody’s warns SA over Eskom funding

Private sector urged to play key role in Kenya’s infrastructure drive

Assessing Nigeria’s key credit challenges

News Tips

Advertise With Us

Newsletters