South Africa Heading for Junk Downgrade, Rating Forecaster Says

Renaissance Capital, which has correctly predicted eight out of nine sovereign rating decisions in emerging Europe and the Middle East since May, is calling a downgrade to junk for South Africa next month, Bloomberg News reported. That view is at odds with the majority in the Bloomberg survey, but Renaissance Global Chief Economist Charles Robertson says South Africa’s fundamentals have deteriorated significantly since May, when Moody’s Investors Service affirmed its Baa3 rating. The next review is on Nov. 1. “The macro numbers are not supportive of South African keeping investment grade,” Robertson “Poor growth, tough public finances, a subdued commodity outlook, tension on the streets as seen in the anti-Nigerian riots, questions about the president’s ability to push through his agenda - all these are worrisome.” Read more