How well will SA’s resilient listed companies weather the junk-status storm?
SA equities have kept investors’ faith through years of turmoil. A downgrade won’t necessarily change that — but investors will need reassurance
The state’s reduced capacity to formulate business policy, political uncertainty and a leadership vacuum continue to hamper SA’s economic growth. A consensus downgrade of the country’s foreign and local currency to sub-investment grade, or junk status, is now possible either on Friday or early next year, from ratings agencies Moody’s and S&P Global Ratings, with Fitch already having awarded the country a junk rating. Yet despite the volatile political and economic environment, SA’s capital and equity markets still work surprisingly well. The JSE recently reached new heights, with the all share index passing the 60,000-point mark, while local companies have raised a total of R152bn from investors during 2017, the second-highest level after the R161bn raised in 2015. The JSE also recently had the largest listing in SA’s history, when Steinhoff African Retail Limited (Star) raising R16bn. Other large capital raisings this year include Vodacom’s share placement at R14.9bn; Sibanye Gold’...
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.