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Down Grade

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Rams
Super Contributor
now inevitable, but does it really matter?
13 REPLIES 13
SimonPB
Valued Contributor
yes to both
Rovert
Super Contributor
What should we be doing to benefit from this, to offset our higher interest rates etc? Short financials and long precious metals? Your views ?
SimonPB
Valued Contributor
certainly out or short banks, long non SA Inc .. commodities, not so sure
Rams
Super Contributor
and open an offshore bank account?
Blik
Super Contributor
Hi Simon, I assume that any downgrade notice will be reported pre-event? If not, any idea when the 3 stooges meet and decide?
partridge
Super Contributor
Opening an offshore bank account - that would have cost you a lot between 9/12 and today...!!!! No decisions should ever be taken in isolation of one's overall objectives - they drive what one should do. The problem is that most people don't have quantifiable objectives: what they do have is objectives for "the weekend" - which get rolled over until they reflect a result - but no intention. ???
SimonPB
Valued Contributor
not that simple, SP has us negative outlook one notch above junk .. they update again in june and dec, market pricing in junk from them I thinks (to a degree) .. fitch is one notch above junk, but stable outlook, moodys is 2 notch above junk but negative outlook ..
Preston
Super Contributor
Ya, Same guys that priced the Mortgage Bond "AAA".
koos2
Super Contributor
ok, so its a buy za ?
Blik
Super Contributor
ok...I just need to tread carefully...my local investment portfolio is geared towards banks and insurance (has been for years), and I maybe need to think about my strategy a bit more. Although my portfolio has done well enough for me. I'm not averse to cash.
Not applicable
before anyone gets into a panic here over ratings downgrades - there is a big difference between sovereign and corporate debt. Just because SA gets downgraded, doesn't mean a bank's bond yields will be affected. The issue to watch out for, as I understand it, is the sovereign ceiling policy, whereby ratings agencies will be more reluctant to rate corporate debt higher than the country in which they operate. But I don't think this is actually a blanket policy as opposed to a guideline of sorts.
Rams
Super Contributor
So it seems, Pravin being Finance Minister not good for Guptas..,,
SimonPB
Valued Contributor
skapp, you are correct .. but what we have seen is they have kept the banks in line with SA inc rating