The Public Investment Corporation (PIC) believes a further sovereign downgrade of SA by credit ratings agencies is highly likely because of sluggish growth and low confidence, which is hurting investment and consumer spending. The PIC, which has about R2-trillion under management, is the investment manager for the Government Employees Pension Fund, the Unemployment Insurance Fund and the Compensation Commission. Finance Minister Malusi Gigaba said on Tuesday that the PIC had warned that SA ran the risk of being excluded from the world government bond index if all the credit ratings agencies downgraded the domestic credit rating to below investment grade. So far only Fitch has downgraded SA’s long-term local currency rating to subinvestment grade, while S&P Global Ratings and Moody’s Investors Service have it at one notch above junk. This partially explained why SA had not yet experienced a mass sell-off in domestic bonds by foreigners. "The PIC expects that in the event of further d...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.