JSE’s annual US trip ‘more sombre’
The JSE’s annual roadshow to New York was “a lot more sombre” this year compared with previous ones, the exchange’s CEO, Nicky Newton-King, has said.
Finance Minister Malusi Gigaba answered all the hard questions in an upfront way and SA Reserve Bank governor Lesetja Kganyago was very clear about the bank’s independence being nonnegotiable, she told City Press.
“All of America’s top money is here. They are mostly longtime investors in the country, the proper money.
“This is not about new investors, it is an opportunity to talk to those who are already invested. People with serious money in the country deserve answers,” she said by phone from New York.
“South Africans are more down on the country than investors are. I think investors are taking a wary look. I think that is the right word.”
The outcome of the ANC’s elective conference next month seemed to be looming large on investors’ minds.
“They are asking about leadership. We need the new leadership to make growth a priority. What investors are investing in is a marketplace they can trust, where they can buy and sell. They are less interested in the performance of the JSE All Share Index and more interested in the leadership team.
“We have to be very honest about the state of South Africa. It is a long-term play. Business is in good hands, the rule of law is strong. There are strong countervailing things like an independent media.
“The upside is very significant. We are saying do not be overly concerned with the short-term noise.
“These guys know,” said King, referring to comments by Anheuser-Busch InBev CEO Carlos Brito at the conference to the effect that South Africa’s problems were nothing compared with those many others were dealing with.
A lot of the money represented at the event is probably invested in government bonds, which are expected to fall to “real junk” status after ratings agency Moody’s scheduled review on November 25.
In his speech at the event, Kganyago said estimates put the outflow of money from the local bond market after this likely downgrade at between R100 billion and R180 billion, depending on how much was already priced into the market.
Foreigners are still progressively taking over the local bond market. Foreign ownership of government debt reached a record of 41.7% in October.