In SA’s new junk-status era and political clutter, investors will need their wits about them to salvage long-term returns. In the past fortnight investment prospects have been rubbished. Pravin Gordhan was unceremoniously booted out and the rand oscillated ominously, shedding 12% in a week to hit R13.90 to the US dollar. In effect, politicians have flipped SA’s economy into the trash can — and government appears to be in denial about this fact. But is it really worth investors getting in a funk about junk? If the missives from SA’s top investment institutions are to be believed, the country’s much-abhorred "junk status" tag — where our foreign-currency bonds are now ranked, below investment grade — is not a one-way ticket to an economic wasteland. Sure, institutions might want a quick application of balm to soothe the nerves of jittery clients who may otherwise withdraw investment funds in a flat panic. But there is ample justification to warn against over-reacting to the junk dilem...
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