SA companies yet to feel the ratings pinch
The flurry of ratings downgrades has yet to burn the nation's big companies, but that might not be long in coming
The flurry of ratings downgrades - both country and corporate - South Africa has experienced over the past two weeks has yet to burn the nation's big companies, but that might not be long in coming. The country's foreign-currency debt was downgraded to junk by S&P Global Ratings and Fitch, which will result in South Africa being removed from a number of indices on international capital markets. Fitch's decision to also downgrade the nation's local-currency debt to subinvestment grade - which S&P has not yet done - further placed South Africa in a position where it might not be able to access certain capital markets. But until S&P or Moody's downgrade the country's local-currency debt to junk the risk to companies is not that high. So far, therefore, not many companies have been hit hard. In the past week, listed companies ranging from rand-hedge industrial heavyweights and those in the resources sector performed well, benefiting from rand weakness. Even the banking sector recovered ...
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