Dawie Roodt – independent economist\u00a0<\/strong><\/p>\n\u201cI think pretty much everybody in the finance world realised that it was coming (junk status) but that it happened only 90 hours after the reshuffle perhaps came as a bit of a surprise and shows how strongly the ratings agency feels about the changes.\u201d<\/p>\n
Roodt said it was \u201cvirtually certain\u201d that the other two ratings agencies would follow suit.<\/p>\n
The economist said the only silver lining was that S&P\u2019s decision might perhaps be the catalyst that pushed president Zuma over the brink.<\/p>\n
\u201cThe moment Zuma decides to step aside, South Africa incorporated will immediately become a buy. We will see an immediate uptick in growth, a rapid inflow of foreign direct investment with a commensurate decrease in unemployment and increased economic growth,” Roodt said.<\/p>\n
\nNeil Roets – CEO, Debt Rescue<\/strong><\/p>\nRoets said that the downgrade will have an immediate impact on all South Africans because it would complicate the process of economic recovery, further impact on the already sky-high unemployment rate and will make the treasury\u2019s job of collecting enough taxes to fund the government\u2019s spending spree more difficult.<\/p>\n
\u201cThere is a massive misconception among many South Africans that decisions by ratings agencies impact mostly wealthy South Africans. Nothing could be further from the truth because the reality is that it will have a profoundly negative effect on all of us.<\/p>\n
\u201cThe Reserve Bank will be under pressure to review the repo rate upwards which will increase the repayments on mortgage bonds, credit card debt and the cost of virtually all other goods and services.<\/p>\n
\u201cWe have one of the lowest growth rates in the BRICS group of countries and this downgrade \u2013 whether or not the other two ratings agencies decide to follow suit \u2013 is going to massively impact the economic recovery process in this country.\u201d<\/p>\n
\nSean Ashton – CIO, Anchor Capital<\/strong><\/p>\n“We have reached the critical juncture in South Africa. We’ve seen fiscal degradation happen for some time, we think it will accelerate if the status quo remains.<\/p>\n
“This downgrade had a lot to do with – calling into question the credibility of Treasury and some of the other state institutions that were previously sacrosanct.<\/p>\n
“We think that the credibility of tyhe new finance minister (Malusi Gigaba is in question). There is a heightened probability of him signing off on projects that South Africa cannot afford.”<\/p>\n
\nDr Azar Jammine – economist, Econometrix<\/strong><\/p>\nDr Azar Jammine said if the rand continues to decline, inflation would not come down as much as anticipated.<\/p>\n
\u201cThat is bad news for the whole economy\u201a including small business.\u201d<\/p>\n
He said there was nothing new finance minister Gigaba could do to appease investors. \u201cHe is seen as a Gupta acolyte.\u201d<\/p>\n
\nChristie Viljoen – senior economist, KPMG<\/strong><\/p>\nViljoen said that a downgrade to junk will result in an outflow of investment funds from bonds and equities as many local and international investment funds are mandated to place their money in investment-grade jurisdictions only.<\/p>\n
“This, in turn, will adversely affect the value of the rand, increase the cost of imports, and keep inflation elevated for longer. The South African Reserve Bank (SARB) would have to adjust its monetary policy stance accordingly.<\/p>\n
“Meanwhile, uncertainty over the short-term trajectory of local politics will weigh on local and foreign investor sentiment \u2013 and hamper the investment needed to address South Africa\u2019s challenges of unemployment, poverty and inequality.”<\/p>\n
\nWayne McCurrie – fund manager, Ashburton Investments<\/strong><\/p>\nThis is truly the first catastrophe in the new SA. If not corrected we have already started on the downward slippery slope to disaster.<\/p>\n
“This is the first time in 25 years that I have started to loose hope for all of us. Unless corrected we truly are no longer a rainbow nation.”<\/p>\n
\nRead: Infographic: How credit ratings work and how junk status will affect you<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"The downgrade of South Africa\u2019s sovereign debt rating to junk status by Standard & Poor\u2019s (S&P) was only a surprise because it happened so soon after president Jacob Zuma\u2019s cabinet reshuffle.<\/p>\n","protected":false},"author":10,"featured_media":118672,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[961],"tags":[26],"class_list":["post-168065","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/168065","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=168065"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/168065\/revisions"}],"predecessor-version":[{"id":168139,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/168065\/revisions\/168139"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/118672"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=168065"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=168065"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=168065"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
![\"\"](\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2017\/04\/Tenures.jpg\")
<\/a><\/p>\n