South Africa junk status

Representatives of Moody’s Investors Service will arrive in South Africa this week ahead of the agency’s decision on the country’s rating. Standard & Poor’s (S&P) and Fitch are due to hold their next ratings review on South Africa in June. Should South Africa receive a “Junk” status it will have devastating consequences for the country’s credit worthiness.

Professional investors, such as hedge funds, pension funds and asset managers are prevented from investing in junk countries. Following its decision to place the country on review, Moody’s on Friday also put several South African companies and public entities on review for a downgrade. These include the ratings of the Industrial Development Corporation of South Africa and the Development Bank of Southern Africa.