Posts tagged with 'junk status'

 

The Rand remains on a rollercoaster of volatility -the currency continued to weaken due to the heightened global growth risks after talk of financial bailout for Eskom

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Last week’s poor global data is indicative of a worldwide economic rough patch. Talk of another massive financial bailout for Eskom has put South Africa on thin ice with Moody’s. The country is said to be fighting a losing battle to keep its last remaining investment grade credit rating.

Foreigners have already begun dumping R2 billion worth of government bonds. This comes before what looks like an imminent downgrade to junk status, which is placing a huge amount of pressure on the local currency.

Last week’s poor global data is indicative of a worldwide economic rough patch.

Talk of another massive financial bailout for Eskom has put South Africa on thin ice with Moody’s. The country is said to be fighting a losing battle to keep its last remaining investment grade credit rating.

Foreigners have already begun dumping R2 billion worth of government bonds. This comes before what looks like an imminent downgrade to junk status, whic
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Foreigners are dumping SA bonds at a rate of almost R2 billion ($132 million) a day as junk status looms

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Investors have been dumping South African government bonds at a rate of almost R2 billion ($132 million) a day in August.

With issuance increasing and a downgrade to junk a looming possibility, non-residents have sold a net R14.4 billion of the debt in August so far, according to JSE data compiled by Bloomberg.

That’s an average of R1.8 billion a day. The sales have wiped out inflows at a time when the country needs foreign investment to close a current-account deficit that was equivalent to 2.9% of gross domestic product in the first quarter.

The government increased the amount of local-currency debt sold at weekly auctions by 37% last week to help pay for a 128 billion-rand bailout for Eskom Holdings SOC Ltd., the state-owned electricity company.

That will push up borrowing and widen the budget deficit, placing the country’s last-remaining investment-grade rating at risk. Moody’s Investors Service, which rates South Africa’s deb
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National Health Plan is going to need at least R180bn to R250bn for 12-month spending – with SA’s faltering economy that’s a disproportionate amount

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Implementing a National Health Plan does not mean, like Eskom, demanding a R50 billion from the government’s money it has collected from taxpayers.

The reality is, too, that it cannot come into effect by making a slight upward adjustment in the personal taxes levied.

The reality is that at least R180bn to R250bn will be required to be ready for a 12-month period.

Of course, South Africa with its poor economy cannot run after it because France and Japan have such medical plans, which is not an unemployment figure of 30%, and there is no ignorance about how such a system manages and not operated.

South Africa is in a financial mess – junk status, and with it an inability to reduce unemployment and thus also violence and corruption.

Maybe the initiators come to mind – because 2026 is around the corner and the economic situation is not going to be corrected in the short time until the new plan is implemented.

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