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JSE led higher by Naspers as SA’s credit rating hangs in balance

JSE led higher by Naspers as SA’s credit rating hangs in balance

The JSE firmed in broad-based gains on Thursday morning, led higher by a strong performance from Naspers, as investors continued to digest a gloomy budget statement.

All eyes are now on Moody’s Investors Service, which will deliver its verdict on SA’s credit rating on Friday. On Wednesday, finance minister Tito Mboweni slashed SA’s growth outlook for 2019 and warned that SA’s debt continued to rise, which may be looked at unfavourably by Moody’s.

The severe deterioration in the fiscal deficit is credit negative and may well embolden Moody’s to place SA’s sovereign rating on a negative outlook, senior FNB economist Siphamandla Mkhwanazi said. “Moreover, we are of the view that the likelihood of a downgrade to subinvestment grade over the coming months has risen substantially,” Mkhwanazi said.

The rand had slipped 2.35% against the dollar on Wednesday, its worst performance in over a year.

At 9.27am the all share was up 0.76% to 56,294.8 points and the top 40 had risen 0.86%. Banks had added 1.23% and industrials 0.83%.

Gold was up 0.19% to $1,498.80/oz and platinum 0.37% to $928.15. Brent crude was 0.59% higher at $60.88 a barrel.

MTN was up 0.44% to R93.99. It said earlier group subscribers in its quarter to end-September rose 3.5-million to 243.7-million.

Naspers was up 1.05% to R2,131.72 and Prosus 1.32% to R1,043.63, tracking gains in Hong Kong-listed Tencent.

Producer inflation data for September is due later on Thursday, while international focus is on US jobs numbers and eurozone third-quarter GDP data.