The South African bond market was weaker in late afternoon trade on Tuesday following reports that Moody’s may soon become the third major ratings agency to downgrade SA, and may keep the pressure on with a negative watch announcement. Nomura analyst Peter Attard Montalto said Moody’s may downgrade SA in the coming weeks, without a visit to the country. The original view was that Moody’s analysts would visit SA sometime towards the end of May and then report at mid-June before its July 3 window deadline. Moody’s decision would not be a surprise to the markets, but analysts say the negative watch could be a factor influencing market behaviour as it may lead to further downgrades if risks, such as fiscal slippage, become a reality. "It is not junk status per se that should concern us," said Old Mutual Multi-Managers investment strategist Izak Odendaal. "We should rather monitor the conditions in the economy that gave rise to the downgrades." At 3.36pm, the benchmark R186 was at 8.80% ...
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