NewsSouthern AfricaSouth Africa's rand, bonds firmer as downgrade fears fade


Posted on Monday, 14 August 2017 16:46

South Africa's rand, bonds firmer as downgrade fears fade

By Reuters

A worker at the Stock Exchange in Johannesburg, South Africa, April 4, 2017. Photo: Denis farrell/AP/SIPASouth Africa's rand firmed on Monday, buoyed by Moody's decision to delay ratings decision on the sovereign that was scheduled for last Friday.


At 1506 GMT, the rand traded at 13.3100 per dollar, 0.97% firmer than its New York close on Friday.

Government bonds also firmed, with the yield for the benchmark paper falling 4.5 basis points to 8.605%.

"They (rand and bonds) were supported by the Treasury's announcement late last Friday that Moody's was not planning to make a sovereign rating decision soon because things haven't changed since the June review," 4Cast analysts said in a note.

The Treasury said Moody's could not publish its rating decision on Friday as the firm had already made two changes to the country's debt status.

Rating opinion on Tuesday

Moody's, which in June cut its rating to one notch above investment grade with a negative outlook, was instead expected to publish a rating opinion on South Africa on Tuesday.

A downgrade by Moody's could have left South Africa rated "junk" by all three major agencies after the sovereign debt was cut to sub-investment by Fitch and S&P Global Ratings in April after President Jacob Zuma fired Pravin Gordhan as finance minister.

On the bourse, Naspers topped the gainers' list on the benchmark Top-40 index, tracking a rebound in its Chinese money maker Tencent Holdings.

Naspers, whose one-third stake in Tencent dwarfs its own market capitalisation, climbed 2.9% to 2,845 rand.

The Top-40 index ended 0.7% higher at 49,108 and the All-share index, the broadest measure of the stock market performance, added 0.56% to 55,465.


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