The JSE was firmer on Tuesday at midday as mining and resource stocks rallied on a weaker rand, as the market digested S&P Global Ratings’ announcement that it had downgraded SA’s credit rating to subinvestment grade. Moody’s was also expected to downgrade SA’s credit rating following its statement on Monday that it was placing the country’s Baa2 rating on review. Rand Merchant Bank analyst John Cairns said the loss of investment grade had come as a further psychological blow to a country that was obsessed for years with being downgraded, and that it would entrench a higher cost of offshore borrowing. S&P’s long-term local currency rating is now on the edge of subinvestment grade, still with a negative outlook. Cairns said one more downgrade from S&P and SA would start to lose investment in the local bond market — the main source of financial inflows in the past few years. The Dow closed flat (-0.06%) on Monday and the Nikkei 225 was down 0.91% in early morning trade. At midday, the...
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