State-owned enterprises have lurched from
crisis to crisis in recent years. Anyone who doubted the damage their
instability could do to the economy should take a look at the report
Standard & Poor’s (S&P) released on Friday.
S&P already had SA’s sovereign credit rating at the lowest notch on the investment grade table. Now it has put the rating on "negative watch", an indication that it is looking to downgrade into subinvestment grade or "junk" bond territory within the next year or two.
Problems at state-owned enterprises are one of the main reasons that might cause S&P to do that. Its comments note the need for an urgent review of the role, ownership structure and operations of the state-owned enterprises.
S&P already had SA’s sovereign credit rating at the lowest notch on the investment grade table. Now it has put the rating on "negative watch", an indication that it is looking to downgrade into subinvestment grade or "junk" bond territory within the next year or two.
Problems at state-owned enterprises are one of the main reasons that might cause S&P to do that. Its comments note the need for an urgent review of the role, ownership structure and operations of the state-owned enterprises.
