Moody’s Investors Service hasn’t said it, but investors already think it: South Africa’s credit is junk, Bloomberg News reported. The company, which rates South Africa’s debt Baa3, the lowest investment level, is due to review its assessment in November. Given Eskom Holdings SOC Ltd.’s financial woes and its implications for government debt, the market is pricing in a downgrade. The premium investors demand to hold South Africa’s dollar bonds rather than U.S. Treasuries is almost twice as much as the average for investment-rated emerging markets.

Read more

South African business confidence fell to the lowest level in four months in July as concerns over political uncertainty and state companies’ finances outweighed the positive effects of lower interest rates and higher commodity prices, Bloomberg News reported. An index measuring sentiment declined to 92 from 93.3 in June, the South African Chamber of Commerce and Industry said Wednesday in an emailed statement. The median estimate of 4 economists in a Bloomberg survey was 93.

Read more

Steinhoff International Holdings NV is considering an initial public offering of Pepkor Europe, its fastest-growing unit, as the scandal-hit South African retailer seeks funds for the next phase of its recovery plan, people familiar with the matter said. The company has been discussing a listing of Pepkor Europe with potential advisers, according to the people, who asked not to be identified because the information is private, Bloomberg News reported. The business -- which owns the Pepco and Dealz chains as well as Poundland in the U.K.

Read more

Eskom Holdings SOC Ltd. urgently needs a plan to turn profitable or South Africa’s state-owned utility will collapse under mounting debt, according to credit agency Moody’s Investors Service, Bloomberg News reported. The generator of more than 90% of the nation’s electricity reported a record annual loss of 20.7 billion rand ($1.4 billion) last week and is regarded as the biggest threat to South Africa’s economy. The government is giving Eskom a 128 billion-rand bailout over the next three years to keep it afloat.

Read more

South Africa’s biggest business lobby criticized the government’s handling of the crisis at power utility Eskom Holdings SOC Ltd. and said it was unrealistic in its approach to the country’s growing debt burden, marking a sharp break with its largely silent approach to the nation’s economic malaise in recent years, Bloomberg News reported.

Read more

Freeman Nomvalo, the new chief restructuring officer for Eskom Holdings SOC Ltd., will divide his time between managing the unbundling of the loss-making state power giant and his job as head of the South African Institute for Chartered Accountants, Bloomberg News reported. The role taken by Nomvalo, relatively unknown among economists and analysts, will be more of a process manager than a standalone company executive, according to a statement by the Department of Public Enterprises.

Read more

The economic challenge facing President Cyril Ramaphosa was laid bare as South Africa’s unemployment rate rose to its highest in more than a decade and the embattled state-owned Eskom power monopoly unveiled its biggest annual loss, the Financial Times reported. Joblessness in Africa’s most industrialised nation increased to 29 per cent in the second quarter, a 16-year high, according to official statistics released on Tuesday. The figure was 27.6 per cent in the first quarter.

Read more

South African President Cyril Ramaphosa is the "last hope" for Africa's most advanced economy, but his government must turn incentive policies into laws to secure more Chinese investment, a senior Chinese diplomat told Reuters, the International New York Times reported on a Reuters story. China is South Africa's largest trading partner and has pledged more investment than any other country since Ramaphosa embarked on a drive last year to attract $100 billion of new investment to lift the economy out of a slump.

Read more

Eskom Holdings SOC Ltd., which supplies about 95% of South Africa’s power and is reliant on government bailouts to remain solvent, is set to announce its second consecutive multi-billion rand annual loss on Tuesday, Bloomberg News reported. The big question is: How many billions? The state-owned utility forecast in January that its loss would widen to about 20 billion rand ($1.4 billion) in the year through March, from 2.3 billion rand the year before.

Read more

South Africa risks falling further into sub-investment territory after Fitch Ratings Ltd. cut the outlook on its assessment of the country’s debt to negative. Fitch reduced the outlook from stable while affirming the junk BB+ rating on nation’s foreign- and local-currency debt, it said in an emailed statement Friday, Bloomberg News reported. A negative outlook usually indicates that the next move could be a downgrade. The decision adds to the risk that the country could lose its last remaining investment-grade rating from Moody’s Investors Service.

Read more