The South African bond market was mixed on Monday morning, appearing to take Fitch’s downgrade of SA’s sovereign credit rating to subinvestment grade in its stride. On Friday, the rating agency downgraded the country’s long-term foreign and local currency ratings by one notch to subinvestment grade. This downgrade comes in the heels of that of S&P Global Ratings, which also downgrading SA’s sovereign credit rating to junk status. Rand Merchant Bank analyst John Cairns said while local news flow remained negative, the market had taken the Fitch downgrade in its stride, "presumably because it was widely expected". The downgrade has kicked SA out of the JP Morgan Emerging Markets Bond index. Cairns said this should result in outflows of between $1.5bn and $2.5bn, " but local assets managed to keep their ground well, hardly reacting to the news". At 09.16am the bid on the R186 was unchanged from Friday’s 9% and that of the R207 at 7.835% from 7.81%
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