Johannesburg - The JSE was up at noon on Monday‚ yet still
amid cautious trade‚ after the latest Standard & Poor’s downgrade of SA’s
sovereign credit rating. S&P downgraded the SA’s rating from BBB+ to BBB
late on Friday and its long-term currency rating to A- from A‚ following hot on
the heels of the Moody’s downgrade a week ago.
At 12:24pm‚ the JSE All Share [JSE:J203] index was up 0.18%
at 36‚504.12 points‚ with the Top 40 - (Tradeable) [JSE:J200] index edging up
0.26% to 32‚360.05 points. Industrials led the upside‚ while banks caused most
of the drag‚ due to the S&P downgrade.
“It is a relatively quiet day‚ and investors are awaiting US
retail sales and manufacturing figures‚ out later today; that might give the
market further direction‚” said Hennie Fourie‚ stockbroker at PSG Konsult in
“SABMiller and Richemont have benefited from the weaker
rand because most of their profits are made outside of SA. A weaker rand
therefore gives them a boost. Most of the rand hedge stock are higher today.
World markets are also up and we normally track global sentiment‚” Fourie
Leading European markets were all trading in the black‚ with
London’s FTSE 100 last seen up 0.49%‚ while in the east‚ Japan’s Nikkei 225
closed 0.51% higher.
Rand Merchant Bank said in a note that while the move by
S&P did not come as a major surprise‚ it seemed the timing of the action
caught the market by surprise.
The ratings agency warned that strikes in the mining sector
were likely to threaten the country’s economic policy framework.
“We believe it is the timing that contributed to the weaker
tone. S&P’s rating is now one notch lower than the other major rating
agencies such as Fitch and Moody’s and one should not be surprised to see
either of them move with actions that bring their ratings in line with S&P
over the next few months. Russia‚ Mexico and Brazil are some of the major
emerging market economies that are rated BBB by S&P‚” the bank said.
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