Sub-Saharan credit crunch
UK-BASED real estate investment trust, Capital & Regional, said yesterday that its properties were valued at £794 million (R13 billion) after it enjoyed a strong occupancy rate and good momentum in leasing activity with 34 new lettings in the second half of last year.
The firm yesterday released its trading update for the second half of last year. For the period under review, the company had 34 new lettings and 15 lease renewals totalling £2.8m in annual rental income. Capital had £57.5m in contracted rent at the end of last month and occupancy rate was at 95.4 percent. Hugh Scott-Barrett, the chief executive of Capital said positive in light of the Brexit vote. “The operating performance has been very encouraging, reflecting stronger consumer in the second half of the year than anticipated following the result of the EU referendum,” Scott-Barrett said. – Kabelo Khumalo CREDIT-WORTHINESS of sovereigns in sub-Saharan Africa has an overall negative outlook for 2017, “reflecting the liquidity stress facing commodity-dependent countries, subdued economic growth and persistent political risk,” Moody’s Investors Service said in a report on the region yesterday.
Lucie Vella, vice-president at Moody’s, said the region’s economies would continue to face commodity-induced liquidity stress this year.
“By end 2016, Moody’s had downgraded a third of the region’s 19 rated sovereigns by an average of two levels versus 29 sovereigns globally, or 22 percent of 134 countries Moody’s rates.”
Moody’s said most of the 19 sub-Saharan countries with Moody’s ratings had started fiscal consolidation plans that would have a positive effect in 2017.
It said Botswana was a notable exception, with the government continuing with a counter-cyclical policy that started in 2015.
Moody’s said gross domestic product growth among Moody’s-rated countries was forecast at 3.5 percent this year, from 1.5 percent in 2016.
Nations dependent on commodity exports would see constrained economic activity.
Sluggish growth in Nigeria and South Africa would greatly influence the region’s outlook, given the size of their economies.
However, the World Bank, in its 2017 world outlook report on Tuesday, said sub-Saharan African growth was expected to pick up modestly to 2.9 percent in 2017, as the region con- on South Africa, Britain and China, among others, this year as rising political risk and debt levels push the number of countries on a downgrade warning to a record high.
“A quarter of the sovereigns are on a negative outlook, which is the highest proportion we’ve had since 2012, the peak of the euro crisis,” said Alastair Wilson, the managing director of sovereign risk.
Top names on the watch list include Britain, Italy, China, Mexico and Brazil.
South Africa is a key decision too. Moody’s rates it at one notch higher at Baa2 than S&P Global Ratings and Fitch, which have it on the last rung of “investment grade”.
Wilson added that South Africa’s institutional strength had been bolstered by the withdrawal of fraud charges against the finance minister.