The JSE opened weaker on Monday in cautious trade as investors digested the risk of an eventual downgrade after S&P Global Ratings maintained its negative outlook on SA. S&P lowered SA’s long-term local currency rating to BBB from BBB+, while the foreign-currency rating was left unchanged at BBB-, both with a negative outlook. Although S&P — together with Moody’s Investors Service and Fitch Ratings — did not reduce SA’s rating to sub-investment grade, or junk status, over the past week, all remain concerned about SA’s low growth and falling GDP per capita ratio. They envisage SA’s GDP growth to remain subdued over the next few years, increasing the likelihood of a downgrade. S&P also cited political tension as a significant risk. "We think that ongoing continued tensions and the potential for event risk could weigh on investor confidence and exchange rates, and potentially affect government policy direction," S&P said. Nedbank Corporate and Investment Banking (CIB) said S&P’s announ...
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