The HSBC purchasing managers index (PMI) for South Africa, which provides an early indication of operating conditions, rose to 52.7 in October — a 22-month high — from 52.6 in September.
This optimistic data was dampened by the news headline that ratings agency, Moody’s, downgraded the country’s credit rating to Baa2. Moody’s says the National Development Plan is potentially the medium run rescue package on the ratings for South Africa. Peter Attard Montalto, Emerging Markets Economist at Nomura, reiterates this: “It will be, without a growth inducing plan, a continued slow slide down the rating scale.”
In the US, the end of the Democrats’ eight years of senate control arrived, as the Republicans celebrate victory. However, this may be the start of yet another legislative gridlock as Mr Obama is set to veto bills he opposes.
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- View South Africa annual reports