SA’s growth forecast lowered further
Moody’s expects it to deteriorate this year
AS SOUTH Africa awaits the Moody’s credit rating decision, the agency yesterday lowered the country’s economic growth forecast further, charging that it expected it to deteriorate this year.
In its updated report on the annual sovereign outlook, Moody’s slashed South Africa’s 2020 growth forecast further to -0.6 percent from a -0.3 percent forecast in February.
Moody’s said that the corporate sector, investment and employment would be negatively impacted by the coronavirus (Covid-19) pandemic.
Sarah Carlson, senior vice-president in Moody’s Sovereign Risk Group, said the country would be affected by declining global growth prospects as the impact of Covid-19 spreads.
Carlson said all emerging markets would grow at rates that were well below their potential as the shocks of the Covid-19 pandemic and the sharp fall in oil prices were exposing sovereigns’ vulnerability along each of the credit channels.
“They will lower gross domestic product (GDP) growth and fiscal strength, deepen weaker sovereigns’ vulnerability to shifts in investor sentiment, and expose wider weaknesses in domestic and international institutions,” Carlson said.
“The rapid spread of the coronavirus outbreak and sharply lower oil and asset prices have significantly weakened the global economic outlook and are creating a severe and extensive credit shock across many sectors, regions and markets.”
Moody’s, the only ratings agency that still has South Africa’s credit rating one notch above sub-investment grade, is scheduled to announce its periodic review of South Africa’s sovereign credit rating on Friday.
The Institute of International Finance (IIF) was not as modest as Moody’s in cutting South Africa’s growth forecast. The IIF said the country’s economy will contract a significant 2.5 percent this year as the world economy entered a recession, with global growth in 2020 cut from 2.6 to 1.6 percent.
“South Africa entered 2020 with an overvalued currency, a persistent current account deficit and anaemic growth. A deep downturn is the likely result in 2020, given the sharp sudden stop in emerging market inflows,” it said. “Underlying all these forecasts is profound uncertainty as to how virulent the Covid-19 pandemic will be in emerging markets. Large urban centres and limited testing are material downside risks.”
Last week, the SA Reserve Bank (SARB) marked down its global growth forecast to 1.1 percent and domestic growth to 0.2 percent for 2020.
SARB said the global economic and financial conditions were expected to remain highly volatile for the foreseeable future.
Covid-19 has infected more than 350 000 people and resulted in more than 15 000 deaths worldwide and collapsed financial markets amid risk sell-offs. South Africa has recorded more than 400 positive cases of Covid19 in two weeks.
NKC African Economics yesterday said that the global economy was forecast to slow to 0 percent growth this year after more countries announced draconian policy measures to limit the spread of Covid-19.
NKC said this GDP contraction meant that the global economy was set to shrink by 2 percent on a quarterly basis in the first quarter, and 0.4 percent in the second quarter, well past the GDP per capita contraction definition of a global recession.
“We now see global growth contracting in quarter one at a faster pace than during the global financial crisis,” it said.
“Global growth is likely to average just 0 percent in 2020, down from 2.5 percent in January, making this our largest two-month forecast revision ever. The speed and scale of the falls in GDP across so many countries will make the first half of 2020 look very much like the global financial crisis.”
PUNTERS, even the shrewdest of them all, do not hide the fact they dislike wagering their hard-earned money when racing is at the mercy of work riders.
Many believe the form seldom works out and that an outsider will undoubtedly send their tickets to the trash can.
However, statistics prove that this couldn’t be further from the truth.
In the most recent work riders' meeting – held at the Vaal on 23 January – the jockeys aboard favourites steered six of the eight horses who topped the betting boards to victory.
Interestingly, there were only two favourites triumphant on the 10-race card for professional jockeys at Turffontein on 19 March. The results are obviously not always that bad for the professionals, but this just goes to show you can trust work riders to make you a profit.
“We are professional jockeys in our own right,” said former Work Riders’ Challenge winner Chamu Mabaya.
The Work Riders’ Challenge is raced over three meetings, with R5 000 going to the winning rider at each meeting. A prize of R20 000 is awarded to the rider who tops the log after all three meetings.
The Work Riders’ Challenge was the brainchild of former champion jockey James Maree. He organised the first work riders’ race in 1985, won by Piet Nhlapo.
“The idea for the Work Riders’ Training Programme came after realising that owners pay millions of rands for horses,” explained Maree.
“Whether it’s in a race or at work – no owner wants a bloke who doesn’t know what they’re doing on their horse. This was unfortunately the case in the past so, I knew something needed to be done to help.”
Maree believes horse racing has no choice but to afford work riders’ a skills development programme.
“If this is not done, racing will fall apart,” he added. Because jockeys ride every day, they can’t work horses in the mornings. This means trainers depend on work riders to do the job.
The success of this initiative is reflected by the fact a work rider like Mabaya is trusted to work valuable horses like Hawwaam for Mike de Kock.
“Getting the programme up and running wasn’t easy,” admitted Maree.
“No one was keen at first, but we eventually got support from Mary Slack, the Racing Association, Phumelela and the Racing Trust.”
It was set up in 1999 by the Racing Trust, which still manages it.
“We welcome riders from all the centres, recommended by trainers.
“They go through a four-month programme, covering basic work riding and pace work.”
Once the team have confidence in the rider's ability and deem him eligible to compete, they’re put in a race up the straight.
Then comes an advanced course, after which graduates are allowed to ride around the turn.
Maree revealed the reason he wanted this to be a success is because he sees himself in these work riders.
“I come from a similar background. I grew up in a poor household so I relate.
“People forget you need both finance and education to get into the Jockey Academy. This means more than 95% of the underprivileged in this country have no chance of making it into the sport.
“This may surprise a few, but one successful work rider can feed as many as ten families. Just one.”
Some work riders – like Lyle Hewitson and Calvin Habib – have gone on to be very successful jockeys, even overseas.
“They are some of the most dedicated and committed people. Rain or snow, they’re up at 4am everyday happy to work horses,” said Maree.
“I have been in racing for 60 years and gave up training because the information I can share is worth more than money. This is my passion and they (work riders) are equally passionate about riding.”
As far as convincing punters to back work riders, his response was: “Anybody can ride a horse, but very few are competent, and horses can sense it.
“To be honest, I would not mind putting my money on a work rider – even if it was against some of the professional jockeys. Riders like Samuel Mosia and Francis Simela understand racing and have a good seat and balance.
“If the horse they are on is healthy and has good form, then I would be willing to back them.
“You need to also understand that work riders only ride maidens, many of whom have poor form.
Just to prove these blokes are good for racing – if you think about it – a lot of these horses would not see the races if there were no work riders.”
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