Friday will be a nail biting day for the JSE as traders wait for S&P Global Ratings’s verdict on SA’s sovereign credit rating.Of the big international credit ratings agencies, S&P has the most pessimistic view of SA, rating it BBB- with negative outlook. A one notch downgrade to BB+ would give South African government bonds "junk status".A drop into junk could possibly force government to hastily redeem bonds bought by pension funds on condition they remained "investment grade" — a fate that happened to cement maker PPC after S&P cut its rating to junk. It would also make future government borrowing more expensive as higher interest rates would have to be offered to attract money from a smaller pool of investors. SA-domiciled corporations would suffer as the country’s sovereign rating is used as the ceiling for their credit ratings.Last Friday, SA got a reprieve from Fitch which lowered its outlook to negative while maintaining its BBB- sovereign credit rating, and Moody’s which iss...
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