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South Africa’s President Zuma Sacked Finance Minister Gordan: Market Reactions

LAGOS (Capital Markets in Africa) – South African CEOs see severe consequences after the cabinet reshuffle. South African President Jacob Zuma’s decision to dismiss Finance Minister Pravin Gordhan has severe consequences for the economy and is a setback to the work done to avoid a credit rating downgrade, a group of business leaders said on Friday. “This decision and the manner in which it was taken is likely to cause severe damage to an economy that is in dire need of growth…

Junk for South Africa as Fitch Joins S&P in Cut on Politics

Posted on by The Editorial Team

JOHANNESBURG (Capital Markets in Africa) – South African debt got dealt a second blow in a week as Fitch Ratings Ltd. joined S&P Global Ratings and cut the nation’s credit assessment to junk following President Jacob Zuma’s move to fire a well-respected finance minister. Fitch reduced the foreign-currency rating to BB+, the highest non-investment grade and on par with Turkey and Portugal, four days after S&P reduced its assessment. The local-currency rating was also lowered one level to…

South Africa Stock Volumes Plunge as Protesters Rally Nationwide

Posted on by The Editorial Team

JOHANNESBURG (Capital Markets in Africa) – Tens of thousands of protesters marched in South Africa to demand that President Jacob Zuma resigns after he fired the finance minister and reshuffled the cabinet. Marchers chanting “Zuma must go” in Pretoria, the capital, walked to the Union Buildings, the official seat of government, while thousands of people faced riot police outside the chained gates of parliament in Cape Town, and rallied in Durban and Port Elizabeth. In Johannesburg, eNCA…

Rand, Bonds Fall as South Africa Junk Rating Triggers Index Exit

Posted on by The Editorial Team

JOHANNESBURG (Capital Markets in Africa) – South Africa’s rand and dollar bonds fell after Fitch Ratings Ltd. became the second company to cut the country’s credit assessment to junk, triggering sales by some investors tracking investment-grade debt indexes. JPMorgan Chase & Co. said it would remove South Africa from gauges tracked by $59 billion of funds. President Jacob Zuma plunged South Africa into a political crisis when he fired Finance Minister Pravin Gordhan in a cabinet purge just after midnight on…

Fitch may be next to slap South Africa with “junk” rating

Posted on by The Editorial Team

JOHANNESBURG (Capital Markets in Africa) – Ratings agency Fitch is likely to follow rival S&P and cut South Africa’s sovereign credit rating to below investment-grade, analysts said, an outcome that would underscore worries about political uncertainty and prompt a further selloff in assets. S&P Global Ratings cut South Africa’s foreign currency debt to speculative grade or “junk” status in an unscheduled review on Monday, citing political tensions that led to the sacking of respected finance…

South African Banks Fall on S&P Downgrade, Rand Weakness but Resilience

Posted on by The Editorial Team

JOHANNESBURG (Capital Markets in Africa) – South Africa’s banking sector fell by nearly three percent on Thursday after S&P cut the credit ratings of several major financial institutions following a sovereign downgrade. S&P cut South Africa’s credit level to junk status on Monday, citing growing concerns of political and policy instability following President Jacob Zuma’s midnight cabinet reshuffle a week ago. A weak rand following the downgrade compounded the impact on banking shares on Thursday,…

“Junk”-rated debt could cost South Africa more than $10bn in lost funds

Posted on by The Editorial Team

JOHANNESBURG (Capital Markets in Africa) – If South Africa loses two of its prized investment grade credit ratings for foreign and local currency borrowing in the turmoil triggered by the sacking of the finance minister, the country could lose more than $10 billion in investment funds. S&P Global has already struck. In an unscheduled review on Monday that prompted a selloff in South African assets, it cut the sovereign rating for external debt to BB+, one…

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