Moody’s downgrade of South Africa’s government bond rating by one notch to Baa1 from A3 on Thursday comes as little surprise‚ according to Malcolm Charles‚ portfolio manager at Investec Asset Management.
“This downgrade was probably the most expected rating action South Africa has had. Moody’s put South Africa on negative watch last November and they have made it well known that it was a serious probability that the downgrade would follow‚” Charles said.
It had therefore come as little surprise and the expected impact had already been largely factored in by the market‚ he said.
“It is worth pointing out‚ however‚ that the Moody’s rating was one notch higher than that of S&P and Fitch‚ so this downgrade brings their rating in line with the others‚” Charles pointed out.
“This action sends a message that as a country‚ our challenge is to ensure we remain focused on creating an investment friendly environment that creates jobs‚” he added. - I-Net Bridge