BRIEF-S&P Says South Africa Outlook Revised To Positive

BY Reuters | CORPORATE | 05/20/22 05:20 PM EDT

May 20 (Reuters) -

* S&P SAYS SOUTH AFRICA OUTLOOK REVISED TO POSITIVE ON RESILIENT EXTERNAL SECTOR; RATINGS AFFIRMED

* S&P SAYS FAVORABLE TERMS OF TRADE CONTINUE TO SUPPORT SOUTH AFRICA'S FISCAL AND EXTERNAL RECEIPTS

* S&P SAYS FLEXIBLE CURRENCY AND DEEP CAPITAL MARKETS ALONGSIDE SOUTH AFRICA'S NET EXTERNAL CREDITOR POSITION WILL HELP CUSHION THE EXTERNAL RISKS

* S&P SAYS FORECAST THAT SOUTH AFRICA'S FISCAL DEFICITS WILL REMAIN ELEVATED BUT GRADUALLY NARROW TO 5% OF GDP BY FISCAL 2025 (YEAR-ENDING MARCH 2026)

* S&P SAYS REVISED OUR OUTLOOK TO POSITIVE FROM STABLE ON SOUTH AFRICA

* S&P SAYS EXPECT SOUTH AFRICA TO POST A CURRENT ACCOUNT SURPLUS IN 2022 (THOUGH SMALLER THAN IN 2021) FOR THIRD CONSECUTIVE YEAR

* S&P SAYS SHARPER-THAN-EXPECTED SLOWDOWN IN CHINA COULD ALSO WEAKEN COMMODITY PRICES AND DAMPEN DEMAND FOR SOUTH AFRICA'S EXPORTS

* S&P SAYS HIGHER-THAN-EXPECTED TAX REVENUE TO HELP SOUTH AFRICA TO REDUCE FISCAL DEFICIT, DEBT AS PROPORTION OF GDP RELATIVE TO S&P'S EXPECTATIONS 6 MONTHS AGO

* S&P SAYS SOUTH AFRICA'S STRUCTURAL CONSTRAINTS, INCLUDING ENERGY SHORTAGES, INFRASTRUCTURAL BOTTLENECKS TO CONTINUE TO LIMIT MEDIUM-TERM ECONOMIC GROWTH

* S&P SAYS THE IMPACT ON SOUTH AFRICA FROM RECENT KWAZULU-NATAL FLOODS IS LIKELY TO BE TEMPORARY AND A RECONSTRUCTION OPERATION IS IN PROCESS

* S&P, ON SOUTH AFRICA, SAYS EXPECT THAT ESKOM WILL FACE SIGNIFICANT PRESSURE THIS YEAR DUE TO HIGHER UNPLANNED OUTAGES AT ITS COAL-FIRED PLANTS

* S&P SAYS VIEW SOUTH AFRICA'S CONTINGENT LIABILITIES AS MODERATE POSING A DRAG ON COUNTRY'S PUBLIC FINANCES

* S&P SAYS SOUTH AFRICA'S EXTERNAL DEBT, NET OF LIQUID ASSETS, IS RELATIVELY LOW, AT LESS THAN 30% OF CURRENT ACCOUNT RECEIPTS

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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