eBusiness Weekly
JOHANNESBURG – South Africa’s rand weakened on Friday, after ratings agency Moody’s says the country’s fiscal outlook a credit negative.
The rand was 0.19 percent weaker at 14.6475 per dollar at 0820 GMT.
Moody’s said a weaker fiscal outlook in South Africa’s medium-term budget policy statement issued this week was a credit negative, sending the rand weaker.
“The needle for a potential downgrade has shifted higher, especially with no signs of the fiscal debt improving,” said ETM economist Halen Bothma.
Investors remained skittish as Africa’s most industrialised economy struggles with ballooning debt that risks pushing its sovereign credit ratings deeper into “junk” territory.
Rating’s agency Moody’s is expected to report on its rating soon. Moody’s is the last of the top three rating agencies to have Pretoria’s debt at investment grade.
The yield on the benchmark government bond due in 2026 was down 1 basis points to 9.360 percent.
On the bourse, the all share index fell 1.30 percent to 50,955 points while the blue chip top 40 index was 1.48 percent lower at 44,733. The bourse was dragged lower by Naspers which slumped 3.69 percent to 2,548 rand, tracking Hong Kong’s Tencent, in which it has a 31 percent stake, down 3.12 percent.
Naspers had earlier said it would invest 4.6 billion rand ($315 million) over the next three years in its technology businesses and to fund technology start-ups, ahead.
The banking index was 1.45 percent weaker. – Reuters Africa
