WATCH: Ratings downgrade could mean SA exits international bond index

2017-10-31 06:30 - Moeshfieka Botha
Old Mutual economist Tinyeko Ngwenya. ~ Fin24

Cape Town - Old Mutual economist Tinyiko Ngwenya says that investors will be carefully watching how ratings agencies react to Finance Minister Malusi Gigaba's maiden mini budget, which he delivered last week in Cape Town.

A ratings downgrade, she said, would see South Africa exit the Citi World Government Bond Index (WGBI).

READ: SA to join Citi world bond index

The SA Government Bond Index was included in the WGBI in September 2012.

At the time, it was became the first African government bond market to be incorporated within the index. 

Ngwenya said that, given that some investors are only mandated to invest in bonds listed in the index, they will have to offload bonds they have in South Africa if SA fell out of the index.

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