Cape Times

Moody’s and S&P to stay after Fitch decides to leave


CREDIT rating agencies Moody’s and Standard & Poor’s have no intention of leaving South Africa, they said, following the decision by Fitch Ratings last week to withdraw from the local market.

Rebecca O’Neill, Fitch’s head of communicat­ions for Europe, the Middle East and Africa, said the rating agency’s decision to withdraw was a business one.

As a subsidiary of Fitch Ratings, Fitch Southern Africa, was subject to the credit agency’s global policies and procedures as an authorised credit rating agency under EU regulation.

“After careful considerat­ion, bare a number of failure to reform.

Russia, which only Fitch of the three main agencies at BBB- still rates as investment grade, is trading as if it were at least three notches into junk. S&P has South Africa’s sovereign credit rating at BBB-, with a stable outlook, the lowest investment grade.

Elna Moolman, a South

countries’ Fitch concluded that given the limited scale of Fitch Southern Africa’s activities, the increased operationa­l burden and financial cost of complying with both EU and South African rating agency regulation­s, it was no longer commercial­ly viable to maintain a locally registered subsidiary.”

O’Neill said it was Fitch’s intent to maintain coverage of southern African entities and transactio­ns whenever possible, and that Fitch was in active discussion­s with the Financial Services Board to clarify restrictio­ns on the regulatory status African economist at Macquarie First South Securities, said there were substantia­l difference­s between some of the key metrics that the rating agencies took into account in their rating assessment­s, with Brazil’s budget deficit and gross government debt comparing unfavourab­ly with South Africa, for example.

However, in both cases, the of its ratings.

However, Kirsten Knight, a spokeswoma­n for Moody’s, said: “Moody’s is registered under the South African Credit Rating Services Act and we look forward to continuing to provide investors with opinions on credit risk.”

Konrad Reuss, the managing director of S&P in South Africa, said the agency had no intention of leaving the country and had a strong commitment to South Africa. – Wiseman Khuzwayo government’s commitment to the fiscal consolidat­ion plans were arguably even more important than the numbers.

“A key reason why Brazil was downgraded was because S&P was no longer convinced that its government is committed to its fiscal consolidat­ion path,” Moolman said. At this stage, there was still a general view that the South African gov-

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