Will Moody's downgrade South Africa to junk status this year?

Will Moody’s downgrade South Africa to junk status this year?

  • Yes

    Votes: 97 89.0%
  • No

    Votes: 12 11.0%

  • Total voters
    109

rpm

Admin
Staff member
Joined
Jul 22, 2003
Messages
65,433
Do you think Moody's will downgrade South Africa to junk status this year? Can you give reasons for your view?
 

Norrad

Senior Member
Joined
Jul 27, 2004
Messages
908
They have given the government plenty of time to turn things around and the lack of visible progress in improving things or punishing those responsible for state capture will probably be the last straw that broke the camel's back.
 

3WA

Executive Member
Joined
Sep 25, 2012
Messages
7,986
To be honest the certainty of a downgrade might be better than the constant worry of the axe on the neck. Drop out of WGBI, system recalibrates, move on.

Only minor consideration might be if Ramaphosa convinces Moodys to wait until November so that the downgrade can't be used against him in the ANC's midyear hullabaloo.
 

wombling

Well-Known Member
Joined
Nov 24, 2012
Messages
430
Yes, Investment has ground to a halt and the government shows no sign of changing their ways. They are now asking how many people have been arrested for corruption and so far the answer remains zero.

Even if Moody's doesn't downgrade, Its already much the same thing right now as if they had.
 

Praemon

Expert Member
Joined
Jan 11, 2007
Messages
1,330
It will happen this year, but we might get a reprieve until November. The worrying part is: what happens afterwards? If the pending "doom" of a downgrade has allowed Tito and those who actually want to improve the economy a reason for hard-line decisions, then that all falls away after the downgrade. Presumably then the ANC will stop taking decisions that will improve the economy - but puts them in opposition of unions, for example - in favour of populist ones which will lead to more spiralling debt and an ever shrinking economy.
 

Mista_Mobsta

Expert Member
Joined
Jan 22, 2015
Messages
1,462
If a non-biased opinion will help, the international market has effectively already priced in the Moody's downgrade on SA's domestic and sovereign bonds when looking at the CDS (Credit Default Swap) spreads. The ZAR may not jump as wildly as one would expect...the biggest issue is what the fallout will be when the SA bonds fall out of the WGBI (World Government Bond Index) after the downgrade.
 

clickingbuttons

Senior Member
Joined
Mar 18, 2018
Messages
592
All the fund managers have already downgraded us in their eyes.

So at least when the inevitable Moody's downgrade happens not much will change.
 

Cius

Executive Member
Joined
Jan 20, 2009
Messages
5,968
5 years back the issue was 50% looting and 50% dodgy tenders and looting. The looting has seen some progress made in terms of new deals I suspect but they have not even begun to solve the bloated headcount and have repeatedly stated they will not allow people to be fired when it is glaringly obvious that is the issue. Hence I do not see the deficit improving anytime soon and hence yes, eventually a downgrade will come.
 

eg2505

Honorary Master
Joined
Mar 12, 2008
Messages
17,275
YES, yes and a thousand times yes.

to NOT downgrade us at some point will bring doubt into their own (moody) credibility.
at some point no amount of bribes can be hidden.
 
Last edited:

ToxicBunny

Honorary Master
Joined
Apr 8, 2006
Messages
87,162
I would be very surprised if Moodys don't downgrade us in their next announcement in March, and if they don't then it will def happen in November
 

Mike Hoxbig

Honorary Master
Joined
Apr 25, 2010
Messages
35,498
All the fund managers have already downgraded us in their eyes.

So at least when the inevitable Moody's downgrade happens not much will change.
From a market perspective not much will change.

When our bonds are dropped from the WGBI, it becomes trickier. If we have trouble servicing our debt now, it could be worse then...
 

Gaz{M}

Executive Member
Joined
Feb 9, 2005
Messages
6,054
All our SOE debt is already deeply rated "junk". Only the Gov debt is still "investment grade". Which means that we are already junk in many respects.

No growth, high interest rates and all this socialist nonsense they want to introduce means we probably won't feel much if it does happen.
 
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