South Africa JSE firmer attracts the attention of ratings agencies

The JSE was firmer on Monday at midday but banks and financials remained under pressure amid fears of a rating downgrade.
Thursday night’s Cabinet reshuffle resulted in finance minister Pravin Gordhan and his deputy Mcebisi Jonas being fired, which raised the attention of ratings agencies.

S&P Global Ratings was scheduled to review South Africa’s credit rating on June 2, but was reported to have held an emergency meeting at the weekend following the Cabinet reshuffle.

On Friday‚ credit ratings agency Fitch warned that the firing of Gordhan had increased the likelihood that the government’s sovereign credit rating would take a knock.

Moody’s pronounces on its rating review on Friday. Rand Merchant Bank analyst John Cairns said the agency would express its concern then, but it was uncertain whether or not Moody’s would downgrade the country then or later in the year.
At noon the all share index was 0.6% up at 52‚370.5 points and the blue-chip top 40 added 0.81%. Banks shed 1.73%, financials 0.78% and general retailers 1.24%. The gold index rose 2.31% and resources added 1.88%.
Diversified miners were all firmer lead by Glencore with 1.41% to R53.28. BHP Billiton was up 1.34% to R209.96.

Rand hedges were all firmer on a weaker rand. British American Tobacco added 2.37% to R902.36 and Richemont firmed 2.5% to R108.67. Naspers was up 1.58% to R2‚351.48.

Losses among the four major banks were led by First Rand, down 2.63% to R45.14. Standard Bank shed 1.98% to R140.91.
Sanlam shed 1.32% to R66.48 and Liberty Holdings 1.48% to R106.65.
Sasol rose 2.81% to R401.55. Brent crude softened 0.39% to $53.46 a barrel after jumping 5.3% last week.
Among retailers, Truworths gave up 2.14% to R84.76.