SIKI MGABADELI: Good evening and welcome to the SAfm Market Update with Moneyweb. My name is Siki Mgabadeli.
Moody’s Investors Service has placed the Baa2 bond and issuer ratings of the government of South Africa on review for downgrade. We are going to look at the meaning of this is.
Then we speak to EOH. They announced their interim results for the six months to end-January, showing a 30% increase in revenue and a 36% increase in profit after tax.
In our SME corner Tumi speaks to Thabo Modise of Shova Lifestyle, a boutique events and exhibitions company.
David Shapiro is watching the markets for us today. But first, Tumisang has your business news headlines.
TUMISANG NDLOVU: Thanks, Siki. Good evening.
Rating agency Moody’s is expected in South Africa next week to evaluate the country’s fiscal position. Moody’s has placed South Africa’s long- and short-term ratings on review for downgrade, citing concerns over the country’s real economy and government’s fiscal policy. Analyst Thabi Leoka airs her views.
THABI LEOKA: If Moody’s downgrades us in June it will only be now aligning us with Fitch and S&P, who have us one notch above junk status or sub-investment grade.
TUMISANG NDLOVU: Meanwhile, Finance Minister Pravin Gordhan has described his trip to the UK and US aimed at boosting investor confidence as a success. Gordhan remains optimistic after engagements with rating agencies Moody’s, Fitch and Standard & Poor’s.
PRAVIN GORDHAN: We have a good story to tell but clearly we need to prove that we are capable of working together to grow our economy, create jobs and make our fiscal framework a viable one, which I think we can actually do.
TUMISANG NDLOVU: Still on Gordhan, opposition parties have raised objections over his absence in parliament today to debate the 2016 budget in which he announced cost-cutting measures and tax adjustments to help boost revenue.
And South Africa’s business confidence stayed at a five-year low in the first quarter of this year. According to the latest RMB data compiled by the Bureau for Economic Research, the figure remained at 36 points. Confidence among manufacturers collapsed to levels last seen during the 2009 recession.
Financial indicators this hour: the rand is at R15.26/dollar, R21.70/pound and R16.80/euro. Gold is at $1 254/oz, platinum at $982/oz and Brent crude oil at $40.43/barrel.
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