Moody's downgrades SA banks to junk

Moody's downgrade of local banks came as no surprise yesterday after it assigned the country with a sub-investment grade rating on Friday. The SA sovereign ratings act as a ceiling and the rating of banks cannot be above that of the sovereign. And investors appeared to take the move to junk in their stride, with shares of Nedbank, Standard Bank and Absa rising. Given the weakness in their share prices this year, all the bad news may already be priced in.

Meanwhile, the All Share retreated again, suggesting the volatility is far from over.

For investors on the JSE looking on in despair, you aren't alone: the All Share Index rout isn't out of line with many other markets whilst relative to peers the rand has held up quite well - a statement that may seem counterintuitive to South Africans forking out R18 for a US dollar. In its latest report, Ingham Analytics also points to recent sober credit analysis from Moody's that lends some refreshing calm to the debate. Is there bounce back potential? What about global GDP? What about credit markets and the impact on equity markets? Click here to find out more.

Meanwhile, "The Market's Twin Towers" on the Ingham Analytics website seems like a title that has more to do with 9/11 in New York than what is happening right now in markets. Another must read from top trader Andrew Kinsey, who as usual puts a different twist on things. Click here to read.

Also today, Zeder investors can look forward to a special dividend next month following the sale of its stake in Pioneer Foods - although it may not be as high as expected - and Afrimat says it's allowed to continue producing iron ore during the lockdown. York Timber wants action to be taken against cheap Brazilian plywood imports and Attacq will be more understanding with tenants who haven't paid their rent in time.

Have a good day and stay safe.

Stephen Gunnion

Managing Editor, InceConnect

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