Rand weakens on Moody’s comments; stocks down

 Rand weakens on Moody’s comments; stocks down

The rand weakened on Friday, after ratings agency Moody’s says the country’s fiscal outlook a credit negative.

The rand was 0.19% weaker at 14.64 per dollar at 0820 GMT.

Moody’s said a weaker fiscal outlook in South Africa’s medium-term budget policy statement issued today would be a credit negative, sending the rand weaker.

“The needle for the potential downgrade has shifted higher, particularly with no signs and symptoms 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 directory of its rating soon. Moody’s is the last with the top three rating agencies to possess Pretoria’s debt at investment grade.

The yield for the benchmark government bond due in 2026 was down 1 basis points to 9.36%.

On the bourse, the all share index fell 1.30% to 50 955 points while the blue chip top 40 index was 1.48% lower at 44 733.

The bourse was dragged lower by Naspers which slumped 3.69% to R2 548, tracking Hong Kong’s Tencent, that it provides a 31% stake, down 3.12%.

Naspers had earlier claimed it would invest R4.6 billion ($315 million) in the next a couple of years to use technology businesses in order to fund technology start-ups, ahead .

The banking index was 1.45% weaker.?

AscendEconomy

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