The JSE opened weaker on Tuesday, as resources softened on flat metal prices and banks firmed on the prospect of greater fiscal prudence in the February budget. Hopes were high that further downgrades can be avoided after the government announced it is looking to implement R30bn in tax hikes and more than R50bn in spending cuts. That will plug the R51bn hole in the budget deficit revealed in the mid-term budget policy statement in October. S&P Global Ratings downgraded SA’s local currency credit rating to sub-investment, or junk status, on Friday, citing SA’s deteriorating fiscal situation. Moody’s has retained its local currency credit rating for now. The rand strengthened in response on Monday and was steady at the firmer level of R13.72 to the dollar on Tuesday morning, bringing gains for the week to more than 3%. Markets were caught off guard by Monday’s rally, said TreasuryOne dealer Phillip Pearce. "We can still expect a lot of volatility as we head towards the December ANC co...
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