Fitch: Negative Rating Actions for South African Corporates Accelerate in 2009
Fitch Ratings-London/Johannesburg-04 June 2009: Fitch Ratings says in a transition study published today that South Africa's corporate ratings are expected to be further affected in 2009 as the country's main trading partners continue to experience challenging market conditions.
"Market conditions significantly deteriorated towards the end of 2008, negatively affecting the credit profiles of South African corporates. Fitch does not believe that the economic downturn will abate in the short-term; a sustained market recovery is only expected towards the end of 2010," says Roelof Steenekamp, Associate Director in Fitch's South African Corporate team.
There were minimal rating actions during H108; but with the onset of the global economic slowdown, negative rating actions accelerated in H208 and Q109, in line with the significant deterioration in the South African economy. This trend is likely to increase in 2009.
The diversified industrial sector showed the most negative rating actions during 2008 and Q109, with the remaining rating actions spread between the mining, automotive, public sector enterprises (PSE) and manufacturing sectors. The telecommunication and property sectors showed no negative rating actions during this period.
The report, entitled "South African Corporate Finance Transition Study", is available on the agency's public website, www.fitchratings.com.
Contact: Roelof Steenekamp, Johannesburg, Tel: +27 11 380 0903; Karabo Matentji: +27 11 380 0910.
Media Relations: Peter Fitzpatrick, London, Tel: + 44 (0)20 7417 4364, Email: peter.fitzpatrick@fitchratings.com.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
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