Fitch rating is the next hurdle for SA

The government, political parties and private sector players have applauded S&P Global Ratings’ decision to grant SA a reprieve and maintain its investment grade credit rating on Friday, but markets are now waiting to hear from rating agency Fitch, which may put SA on negative outlook this week.

The rand strengthened on news of S&P’s decision to affirm SA’s rating, gaining more than 3%, to close at R15.08 to the dollar when markets closed on Friday.

Although there is no official date for the Fitch announcement, Treasury spokeswoman Phumza Macanda said its information was that Fitch would announce the outcome of its ratings review on Wednesday, probably after the markets close.

Like S&P, Fitch has SA’s foreign currency rating at just one notch above subinvestment grade or "junk" status, after it downgraded it in December on concerns about SA’s weak growth performance and potential.

However, Fitch maintained a "stable" outlook on the rating — which could change to negative.

Nomura economist Peter Attard-Montalto believed there was a "moderately high" chance of a negative outlook.

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