south africa recommended for investment and gets moodys seal of approval
News Posted On: 26 June 2009
MOODY's has given the South African economy a resounding vote of confidence, and said that it sovereign rating was not at risk, and that the country can borrow more from international markets.
"We don't think there's financial risk to the [sovereign] rating. We don't think there's economic risk to the rating," said Kristin Lindow, Moody's senior vice president and sovereign analyst for South Africa.
"We have a positive outlook in place on the foreign currency rating. Most likely it would change upward if it were to change, not downward."
Lindow also said that the South African recession was not expected to last anymore than 9 months and that because of its low debt levels, there was room for South Africa to borrow more from international markets.
South Africa recently raised in which it raised $1.5bn, above the $1bn initially sought, with a foreign bond issuance.
"Primarily the issuance is to refinance exiting maturities, so they wouldn't raise government debt levels by doing so. They do have space to borrow more. That's the beauty of having kept debt so low," she said.
Moody's has upset a lot of governments lately by downgrading their ratings, their faith in the South African economy will give faith around the world that South Africa is one of the safest places to invest.
According to Les Calvert, director of overseas property portal Property Abroad.com, investing in a South African property is not only incredibly safe but also incredibly financially rewarding.
"We have been recommending South Africa property for investment since the middle of last year, and have been unwavering in this even since the downturn stuck the country in Q1. South Africa's economy has shown incredible stability and growth potential in the last few years, and there is constant demand in the internal housing market, which translates to a sound exit strategy for overseas investors," he said.
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