Lance Chalwin-Milton, Joint Managing Director of specialist property sales house The High Street Auction Co, says the series of Moody’s downgrade announcements is a further setback to the recovery of international investor confidence in South Africa.
“The Moody’s axe has struck deeply. On the one hand it is unfortunate but understandable that the credit ratings of parastatals are inexorably linked to that of the country as a whole and will become collateral damage to the global market’s dwindling faith in South Africa’s ability to effect an economic turn-around in light of national policy decisions and political portfolio changes made this year”.
“On the other, independent financial institutions and corporates in this country are operating in challenging conditions as a result of the current macro-economic framework, but their simultaneous ratings downgrades will in the long run only create further difficulties for both South African business and consumers and they should therefore not be the whipping boys for national policy decisions they did not make”.
“The auction sector’s commercial and industrial property trade is a multi-billion rand annual industry, but the inevitable fiscal belt-tightening that will follow these downgrades does not bode well and could potentially push buyer and seller expectations further apart.”