Downgraded Countries Were Top Emerging Market Performers in 2016 (IOL)
Feroz Basa, a joint fund manager of the Old Mutual Global Emerging Markets Fund at Old Mutual Investment Group in South Africa, has written that the recent sovereign rating downgrade makes his country the third BRICS nation to have received a junk credit assessment from Standard and Poor’s (S&P) Global Ratings. However, he also pointed out that Brazil and Russia – the other two countries to have experienced downgrades of this nature – were the top emerging-market performers last year.
Basa goes on to write that:
Although there has been a slight sell-off of South African bonds and equities following the downgrades – along with an initial weakening of the rand – the extent of this has been far less than what occurred in Brazil.
At this point, South Africa is not displaying the effects typically associated with a downgrade; in fact, the rand has moved back to its long-term average. However, this could change, depending on Moody’s looming rating decision…
…South Africa is currently not a screaming buy, which raises the question of how best to diversify away from South Africa.
To read the whole article, Downgraded Countries: Top emerging-market performers last year, go to the website of IOL. In addition, check out our South Africa ADRs list and South Africa ETFs list.
- Moody’s Downgrades South Africa Banks, Insurance Companies and Others (Moody’s)
- Volkswagen Hit By Falling Emerging Market Sales (FT)
- S&P South Africa Downgrade Excerpt (Rand Daily Mail)
- South Africa’s Economic and Potential Downgrade Woes (Bloomberg)
- New Fragile Five Facing a Forex Crisis: Argentina, Brazil, South Africa, Ukraine & Venezuela (Institutional Investor)
- Election Results in Some Fragile Five Emerging Markets Calm Investors (Reuters)
- Mark Mobius’s Favorite Emerging Markets: Indonesia, Russia, Brazil, Vietnam and South Africa (WSJ)
- China Still Leads the BRICs in the Global Competitiveness Report
- Psigma’s Gregory: Avoid Economies With Current Account Deficits (FE Trustnet)
- 2017 Global Retail Development Index (ATKearney)