Moody's Rating: Life-Saver to South Africa's Economy?

Proshare

Friday, November 08, 2019   / 03:00PM / United Capital Research / Header Image Credit: City Press

 

So far, the South African economy has remained under pressure in 2019, amid faltering output growth, massive inequality, rising unemployment, and power sector crisis. This remains a major concern for investors, as the economic outlook for the country seems rather melancholic. Despite President Cyril Ramaphosa's economic stimulus and recovery plan launched in Sept 2018, Q1-19 annualized GDP growth sank to a new low since the financial crisis, down in the negative region at -3.2%.

 

Recently, the South African rand and government bonds surged after a renowned global rating agency, Moody's, kept the country's investment grade credit rating, with South Africa's sovereign debt rating at Baa3. However, the rating agency revised the outlook for the economy from 'stable' to 'negative', implying deterioration in economic growth and rising debt as alarming issues. The negative outlook signifies that there is a cover of 12-18 months, in which a downgrade could be delivered. Nevertheless, Moody's made it clear that a credible budget statement in Feb -2020 would be crucial in maintaining the current rating.

 

In our opinion, South Africa must hasten the pace of reforms, in order to strengthen investors' confidence, avoid massive outflows of funds and the potential increase in costs of debts, should investors price in these growing risks.

 

Top African Stories 

S.Africa manufacturing, business confidence falls take shine off investment drive: South Africa's manufacturing contracted by more than expected and business confidence tumbled in data released on Thursday, casting further doubt over the economy a day after President Cyril Ramaphosa secured $24 billion of investment pledges. Read more

 

Kenya's president finalises removal of rate cap for banks: Kenya's President Uhuru Kenyatta has signed a law that scraps a cap on banks' commercial lending rates which had been blamed for stalling lending to businesses, his office said on Thursday.  Read more

 

Ivory Coast seeks oil majors as it opens oil & gas licensing round: Ivory Coast wants more explorers for oil and gas as it seeks to boost economic growth, according to Energy Minister Abdourahmane Cisse.  Read more

 

South Africa Makes Headway in $100 Billion Investment Drive: South African President Cyril Ramaphosa said his administration is on track to lure $100 billion in new investment within five years, with more than $16 billion already committed and many more projects in the pipeline. Read more

 

Angola to name licensing winners in April, new round in Jan: Angola expects to announce the winners of its 2019 oil and gas licence auction round in April as part of a multi-year plan to boost declining output, a senior executive at the National Agency of Petroleum, Gas and Biofuels (ANPG) said on Thursday. Read more

 

Central Bank Of Nigeria Automates Nigerian Export Proceeds Form ("Form NXP") For Commercial Exports: The Central Bank of Nigeria, pursuant to powers conferred on it by the Foreign Exchange (Monitoring & Miscellaneous Provisions) Act, 1995 to issue guidelines regulating export and import trade transactions in collaboration with relevant governmental entities, issued a circular tagged Automation of Form on the Trade Monitoring System.  Read more  

 

Looking Forward

 

Angola

Oct-19 Consumer Price Index - November 12th

Oct-19 Net Reserves - November 17th

 

Ghana 

Oct-19 Consumer Price Index - November 13th

Sep-19 M2 Money Supply YoY - November 17th

 

Kenya

Sep-19 Overseas Remittances - November 15th

Nov Benchmark Interest Rate - November 25th  

 

Senegal

Oct-19 Consumer Price Index - November 15th

 

Morocco

Oct-19 Consumer Price Index - November 22nd

Oct-19 Money Supply M3 YoY - November 29th

 

Nigeria

Oct-19 Consumer Price Index - November 14th

Q3-19 GDP Report - November 25th

 

South Africa

Sep-19 Mining Production YoY- November 14th

Oct-19 Consumer Price Index - November 20th 

 

Visit African Markets in Proshare MARKETS

Proshare Nigeria Pvt. Ltd.

 

 

 Proshare Nigeria Pvt. Ltd.

 

Related News 

1.      Argentina Crisis Adds to Neighboring Economies' Headwinds

2.     Slowing Growth and Interest Rate Cuts in Frontier Economies

3.     Nigeria - South Africa New Trade Deal: Anything to Cheer?

4.     Major UK Banks Prepared for Brexit Challenges Ahead

5.     Chinese President Meets Solomon Islands PM, Pledging Closer Cooperation

6.     CIV, Kenya and Ireland Join The Top Five of 20 Markets With The Greatest Potential

7.     Can SSA's Biggest Economies Join The 2nd Monetary Easing Cycle?

8.     Protectionism Choking Global Growth Prospects

9.     Xenophobia - Organised Crime or Spontaneous Fear?

10.  Monetary Policy In Africa: Singing A Global Chorus?

11.   Protectionism Choking Global Growth Prospects

12.  Xenophobia - Organised Crime or Spontaneous Fear?

13.  Monetary Policy In Africa: Singing A Global Chorus?

14.  UK Political Volatility Means Risk of No-Deal Brexit Is Still Significant

15.  Egypt, Geely Sign MoU For Producing Electric Cars

16.  Kenya Lending Rate Cap Weighs on Bank Earnings and Loan Growth

17.  Nigeria-South Africa; Trade Not Xenophobia, A Handshake Across the Sub-Sahara

18.  Annual GDP Growth Falling in Virtually All Large Economies

19.  Zambia's Inflation Rate: A Justifiable Outcry For Policy Intervention

20. Global Economy Continues to Walk on Eggshells, Sentiments Remain Tepid

 

Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.


READ MORE:
Related News
SCROLL TO TOP