
<p>JOHANNESBURG (Reuters) &#8211; Ratings agency Moody’s said on Monday that it had lowered its forecast for South Africa’s 2019 economic growth to 1.0% from 1.3% after it said a first-quarter contraction had dented the government’s revenue and policy options.</p>



<p>Moody’s is the last of the big three international credit firms to rate South Africa at investment grade.</p>



<p>President Cyril Ramaphosa’s efforts to revive Africa’s most advanced economy were dealt a blow last week when data showed gross domestic product had contracted by a quarterly 3.2% in the first three months of 2019, the largest contraction in a decade.</p>



<p>Ramaphosa’s African National Congress (ANC) is also in the midst of a row over the central bank’s role, which has rattled financial markets.</p>



<p>“The quarterly decline, the largest in 10 years, is credit negative for the Government of South Africa’s (Baa3 stable) revenue and policy options,” Lucie Villa, Moody’s lead sovereign analyst for South Africa, wrote in a research report.</p>



<p>“The first-quarter contraction presages low growth in the year as a whole,” Villa added.</p>



<p>If Moody’s were to relegate South African debt to “junk” status, billions of dollars could leave the economy, analysts say.</p>



<p>Reporting by Alexander Winning; editing by John Stonestreet<br></p>


Moody’s lowers South Africa’s growth forecast after Q1 GDP contraction, what you need to know…

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<p>According to a research report published by ratings agency, Moody&#8217;s, South African government debt is expected to reach 65 per cent of GDP by fiscal 2023. One of the factors adding to this figure is the deteriorating state of the country&#8217;s state owned entities. Tertius Troost, Tax Manager, Mazars South Africa joins CNBC Africa to give analysis.</p>


Is Treasury setting ambitious revenue targets for SARS?

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<p>After the much anticipated Moody’s credit rating on South Africa being reprieved last week Friday, Yesterday they released a credit opinion on South Africa. Moody’s has relieved the country as they have left the rating at Baa3 with a stable outlook. Although the credit opinion does not constitute a rating action, this saw a positive push to the rand and other South African sectors. ABSA Senior Economist, Peter Worthington joins CNBC Africa for more.</p>


Peter Worthington on what SA should do to improve its credit rating


<p>JOHANNESBURG, April 2 (Reuters)&nbsp;&#8211;&nbsp;Moody&#8217;s said on Tuesday that South Africa&#8217;s sovereign credit rating was still investment grade, further boosting the rand&nbsp;<a href="reuters://REALTIME/Verb=FullQuote/ric=ZAR=D3">ZAR=D3</a>&nbsp;several days after the ratings agency delayed a review of the country&#8217;s creditworthiness.</p>



<p>Moody&#8217;s is the last of the big three ratings agencies to give South Africa an investment-grade rating, so markets are sensitive to any pronouncement it makes on the fiscal and economic strength of Africa&#8217;s most industrialised economy.</p>



<p>Its credit opinion report, which does not constitute a rating action, Moody&#8217;s said that South Africa&#8217;s credit rating was still Baa3, the lowest rung of investment grade, with a stable outlook.</p>



<p>&#8220;While economic growth will remain slow and fiscal strength will continue eroding, we expect South Africa&#8217;s credit profile to remain in line with those of Baa3-rated sovereigns,&#8221; the report said.</p>



<p>&#8220;South Africa&#8217;s credit profile is supported by a diversified economy, a sound macroeconomic policy framework and a deep pool of domestic investors thanks to well-developed financial sector and markets,&#8221; it said.</p>



<p>The rand rallied on Monday after Moody&#8217;s said late on Friday that it would not publish a review of South Africa&#8217;s debt rating as planned.&nbsp;<a href="reuters://REALTIME/verb=Headlines/ric=ZAR/">ZAR/</a></p>



<p>In accordance with European Union regulations, Moody&#8217;s provides dates for the potential release of both solicited and unsolicited sovereign credit-rating actions, but it can alter those dates at its discretion.</p>



<p>Some South Africa-focused investors had worried that wider deficit projections in this year&#8217;s budget and a spate of national power cuts could prompt Moody&#8217;s to downgrade the outlook, or even the rating, on Friday.&nbsp;(<a href="reuters://REALTIME/verb=NewsStory/ric=nL8N21D3AM">Full Story</a>)&nbsp;(<a href="reuters://REALTIME/verb=NewsStory/ric=nL5N20F3R9">Full Story</a>)</p>



<p>The rand added to Monday&#8217;s gains after Moody&#8217;s published its report on Tuesday.</p>



<p>(Reporting by Alexander Winning, editing by Larry King)</p>


Moody’s maintains South Africa’s rating at investment grade


<p>JOHANNESBURG (Reuters) &#8211; South Africa’s rand firmed against the dollar early on Monday as ratings downgrade fears eased after Moody’s said late on Friday it would not publish a review of the sovereign debt rating as indicatively scheduled.</p>



<p>The currency was further supported by a broader boost to investors’ risk appetite following positive Chinese factory gauges and signs of progress in Sino-U.S. trade talks.</p>



<p>At 0615 GMT, the rand traded at 14.3275 per dollar, 1.26 percent firmer than its New York close on Friday.</p>



<p>“The rand is demonstrating some of the market’s relief following no action by Moody’s last week, with it clawing back some ground during the overnight trade on Sunday,” said Bianca Botes, a corporate treasury manager at Peregrine Treasury Solutions.</p>



<p>South African markets on Friday were on edge over the impending review, with some economists concerned that a power crisis will cost the country its last investment-grade rating and lead to the outflow of billions of dollars.</p>



<p>Moody’s rates South Africa’s foreign and local currency debt on their lowest level of investment grade at ‘Baa3’, with a stable outlook.</p>



<p>In fixed income, the yield on the benchmark instrument due in 2026 dipped 6 basis points to 8.55 percent in early trade.</p>



<p>Reporting by Olivia Kumwenda-Mtambo, editing by Louise Heavens </p>


South Africa’s rand firms as Moody’s delays credit rating review, what you need to know…


<p><em>Chris Holdsworth, investment strategist at Investec Wealth &amp; Investment, discusses the Moody’s statement on South Africa’s credit rating that is due to be released on 29 March.</em></p>



<p>Historically, downgrades have proven to be a buying opportunity as markets tend to price in the downgrade in advance. Downgrades also usually focus the minds of governments to institute required reforms.</p>



<p>Moody’s is the only rating agency that has not downgraded South Africa to sub-investment grade; so a downgrade could affect South Africa’s inclusion in a number of global bond funds and indices.<br><br>Moody’s is unlikely to downgrade South Africa this time around, but could put South Africa on a negative outlook, which would mean a subsequent downgrade if the issues raised are not addressed. Among the most pressing of these is <a href="https://www.investec.com/en_za/focus/economy/eskoms-financial-stability-uncertain-despite-tariff-hikes-and-bailouts.html">the Eskom crisis.</a><br><br>However, he also points out that bond markets are already pricing South African government bonds at sub-investment grade. We are priced at worse than Brazil, which is already sub-investment grade.<br><br>It’s a similar picture in the currency market (the rand is weaker against its emerging market peers) and also in the credit default swap (CDS) market, which measures the cost of insuring against default.<br></p>



<h4 class="wp-block-heading">A downgrade can be a buying opportunity</h4>



<p>                                                                                 If a downgrade does happen, it&#8217;s not all bad news. Based on analysis of sovereign downgrades over the years, the actual downgrade has been a buying opportunity: credit default swap spreads typically come down over the subsequent six months.<br><br> This sounds counter-intuitive, but there is some logic to it. Markets tend to price in the downgrade in advance, while the downgrade usually focuses the minds of governments to institute reforms that will address their weaknesses. </p>



<h4 class="wp-block-heading">Do ratings really matter?</h4>



<p>                                                                                 Given the above, one has to ask: do ratings really matter? They do, simply because a number of global bond indices (which are tracked by passive funds) require a country to have an investment grade rating to be included, while many actively managed funds only invest in investment grade bonds, which indicates there would in all likelihood be an outflow in the event of a downgrade.<br><br>Similarly, many corporate bond issuers (including banks) would be affected. The Reserve Bank has been conducting stress tests in this regard.</p>



<p><br></p>


Moody’s decides: Has a downgrade to junk already been priced in?

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<p>Peter Attard Montalto, Head of Capital Markets Research, Intellidex joins CNBC Africa to look at Moody’s ratings on South Africa and MPC meeting.</p>


Intellidex reviews SA MPC meeting, Moody’s ratings expectations

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<p>Moody’s is the only ratings agency to still have South Africa above junk status. Will it change its mind after Wednesday’s Budget? CNBC Africa spoke to Lucie Villa, Moody’s Lead Sovereign Analyst for South Africa to find out.</p>


Exclusive: Moody’s reacts to SA’s #Budget2019

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<p>Under the circumstances, Cas Coovadia, Managing Director of the Banking Association of South Africa, was happy with the Budget Speech today. He told CNBC Africa’s Fifi Peters it was important to put conditions for the utilisation of funds for SEOs, and to make public the details of the Presidential Task Team’s recommendations and how Eskom will be broken up into three, and how the funding will be linked to that. He also gave his opinion of the Budget as a whole and a potential ratings downgrade.</p>


Did fimin Mboweni do enough to avoid ratings downgrade?

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<p>With South Africa’s debt-to-GDP ratio increasing and breaching its fiscal deficit ceiling will Moody’s downgrade it to junk? Lesetja Kganyago, Governor of the South African Reserve Bank explained what a downgrade to junk would mean.</p>


#Budget2019: What a Moody’s downgrade will mean for SA

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<p>Moody’s has given a negative outlook for sovereigns in Sub-Saharan Africa in 2019. The ratings agency says its outlook is anchored on the persistent credit challenges on on-going fiscal and external vulnerabilities in these economies. Daniela Re Franschini, Assistant Vice President in Sovereign Group at Moody’s joins CNBC Africa to discuss the details.</p>


Moody’s gives negative outlook for sub-Saharan economies in 2019

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<p>Moody&#8217;s Investors Service has changed its outlook for African banks from Negative to stable. They also expect most rated banks on the continent to maintain stable profitability and build up their capital buffers. Constantinos Kypreos, Senior Vice President for Moody&#8217;s Financial Institutions Group joins CNBC Africa to discuss this.</p>


Moody’s changes outlook for African banks to stable

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<p>Moody&#8217;s Investors service says Nigeria&#8217;s credit profile is constrained by the continued exposure of the country’s balance sheet to shocks because the government has been unable to expand its non-oil revenue base sufficiently. Aurelien Mali, Vice President and Sovereign Analyst at Moody’s join CNBC Africa to discuss the details.</p>


Nigeria’s credit profile constrained by exposure to shocks – Moody’s

<p>JOHANNESBURG (Reuters) &#8211; Moody’s said on Friday that a weaker fiscal outlook in South Africa’s medium-term budget policy statement issued this week was a credit negative, sending the rand weaker.</p>
<p>“The government’s revised budget policy statement projects larger fiscal deficits and higher government debt, amid slower growth, a weaker rand and higher interest rates than expected in February, a credit negative,” Moody’s said in a research note.</p>
<p>Moody’s is the last of the top three agencies to still rate the country investment grade.</p>
<p>Reporting by James Macharia; Editing by Robin Pomeroy</p>


Moody’s says weaker fiscal outlook highlighted in SA’s mini budget a credit negative

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<p>Ravi Bhatia, Director of Sovereign &amp; International Public Finance Rating, S&amp;P Global Ratings spoke to CNBC Africa about Tito Mboweni&#8217;s appointment as finance minister.</p>

S&P reacts to Tito Mboweni’s appointment as finmin

<p>CAPE TOWN (Reuters) &#8211; South Africa expects Moody’s to release its ratings review after next week’s medium term budget policy statement (MTBPS), Dondo Mogajane, the director general of the National Treasury said on Tuesday.</p>
<p>Mogajane said he met Moody’s representatives at an international financial conference in Bali last week and told Reuters that the ratings agency “will obviously get back to us after the MTBPS.”</p>
<p>Moody’s, the last of the top three agencies to still rate the country investment grade, did not publish the review on Friday as was widely expected.</p>
<p>Reporting by Wendell Roelf; Writing by Mfuneko Toyana; Editing by James Macharia</p>


South Africa’s ratings review to be released by Moody’s after Medium term budget

<p>JOHANNESBURG (Reuters) &#8211; The South African rand firmed against the globally hobbled dollar early on Friday ahead of the country’s credit review announcement by ratings agency Moody’s later in the day.</p>
<p>The rand was 0.85 percent stronger at 14.5100 per dollar at 0650 GMT, having closed in New York at 14.6350.</p>
<p>The rand is expected to trade between 14.3500 and 14.7000 to the dollar on Friday, NKC African Economics wrote in a note.</p>
<p>Moody’s is the last of the top rating agencies to have Pretoria’s long-term foreign-currency debt in investment grade.</p>
<p>South Africa’s stable outlook on its credit rating means there is little chance of a downgrade, Moody’s said on Sept. 13, but a commitment to fiscal consolidation at the October budget would be key to maintaining the positive rating.</p>
<p>The rand was supported by the slightly-better-than-expected South African manufacturing production data for August.</p>
<p>Globally, the U.S. dollar traded at its lowest level this month against its major peers on Friday as declining U.S. treasury yields and further losses on Wall Street soured sentiment. [FRX/]</p>
<p>In fixed income, the yield on the benchmark government bond due in 2026 fell 1 basis points to 9.255 percent.</p>
<p>Stocks are due open firmer at 0700 GMT, with the JSE securities exchange’s Top-40 futures index up 1.10 percent.</p>
<p>Reporting by Nomvelo Chalumbira; Editing by Ed Stoddard</p>


Moody's

Moody’s lowers South Africa’s growth forecast after Q1 GDP contraction, what you need to know…

Is Treasury setting ambitious revenue targets for SARS?

Peter Worthington on what SA should do to improve its credit rating

Moody’s maintains South Africa’s rating at investment grade

South Africa’s rand firms as Moody’s delays credit rating review, what you need to know…

Moody’s decides: Has a downgrade to junk already been priced in?

Intellidex reviews SA MPC meeting, Moody’s ratings expectations

Exclusive: Moody’s reacts to SA’s #Budget2019

Did fimin Mboweni do enough to avoid ratings downgrade?

#Budget2019: What a Moody’s downgrade will mean for SA

Moody’s gives negative outlook for sub-Saharan economies in 2019

Moody’s changes outlook for African banks to stable

Nigeria’s credit profile constrained by exposure to shocks – Moody’s

Moody’s says weaker fiscal outlook highlighted in SA’s mini budget a credit negative

S&P reacts to Tito Mboweni’s appointment as finmin

South Africa’s ratings review to be released by Moody’s after Medium term budget

South African rand firms against US dollar ahead of country’s credit review

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Moody's

Moody’s lowers South Africa’s growth forecast after Q1 GDP contraction, what you need to know…

Is Treasury setting ambitious revenue targets for SARS?

Peter Worthington on what SA should do to improve its credit rating

Moody’s maintains South Africa’s rating at investment grade

South Africa’s rand firms as Moody’s delays credit rating review, what you need to know…

Moody’s decides: Has a downgrade to junk already been priced in?

Intellidex reviews SA MPC meeting, Moody’s ratings expectations

Exclusive: Moody’s reacts to SA’s #Budget2019

Did fimin Mboweni do enough to avoid ratings downgrade?

#Budget2019: What a Moody’s downgrade will mean for SA

Moody’s gives negative outlook for sub-Saharan economies in 2019

Moody’s changes outlook for African banks to stable

Nigeria’s credit profile constrained by exposure to shocks – Moody’s

Moody’s says weaker fiscal outlook highlighted in SA’s mini budget a credit negative

S&P reacts to Tito Mboweni’s appointment as finmin

South Africa’s ratings review to be released by Moody’s after Medium term budget

South African rand firms against US dollar ahead of country’s credit review

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