Newsflash: Junked

Newsflash: Junked
equities 30 march 2020
Source: Bloomberg, *time of writing 06h30, 2020-03-30

Sadly, South Africa recorded its first COVID-19 related deaths with a woman in Cape Town and a man in Ladysmith passing away over the weekend. Mental health issues are also increasing. A finance minister of Germany’s Hesse state died by suicide, apparently over concerns regarding the economic fallout from the virus. If you or anyone you know is struggling, have them speak to a mental health professional, there is help available.

On Friday night passed, Moody’s downgraded our sovereign debt to sub-investment grade. The Coronavirus was the final straw. The Rand weakened and is currently testing R18 to the USD. There will be capital outflows from our bond market by foreign investors as the World Government Bond Index will exclude SA bonds which are no longer investment grade. The exclusion is delayed until 1 May, due to low liquidity in global markets. Finance Minister Tito Mboweni is bullish about structural reforms to the economy saying: ”We will do what we have to do to get the country financially sound.”

Minister Mboweni said that the government will look at all funding solutions including from the IMF, World Bank and BRICS Bank, although they are not needed immediately. Such funding will come with strict requirements that will support structural reforms which in the long term could be good for the economy.

coronavirus numbers 30 march

For more information contact:

Greg Flash
Chief Investment Officer
e. greg@cinnabarim.co.za, c. +27 72 668 8964
FSP Number 45402, w. www.cinnabarim.co.za
Cinnabar Cape Town, 298 Main Road, Kenilworth, 7708

Windall Bekker
Head of Distribution
e. windall@cinnabarim.co.za, c. +27 72 191 0492
FSP Number 45402, w. www.cinnabarim.co.za
Cinnabar Cape Town, 298 Main Road, Kenilworth, 7708