Bruce Whitfield interviews Dr. Adrian Saville, CEO of Cannon Asset Managers, and Professor Chris Malikane of the University of the Witwatersrand.
ANC President Cyril Ramaphosa speaks to supporters in Soweto during the party's Gauteng campaign stage. Image: @ MYANC / Twitter.
CAPE TOWN – South Africa should have been downgraded long ago, analysts said.
In an interview with The Money ShowBruce Whitfield, Dr. Adrian Saville, CEO of Cannon Asset Managers, said South Africa "cut a lot of slack."
His comments came before Moody's rating agency in South Africa on Friday.
"Capital markets have the price of South Africa as if we have been taken to the degree of underinvestment … They have valued us that way for some time."
He added: "We are in a difficult economic situation and it does not look like it will improve."
Whitefield also spoke to Chris Malikane, an associate professor of economics at the University of the Witwatersrand.
Malikane weighed before Moody's review. He agreed that the country should have been downgraded by Moody's and added that rating agencies were more concerned about the country's policy, ie the upcoming elections.
"President Ramaphosa announced bold policy statements that most of his predecessors did not have the political courage to do. Rating agencies would not want to upset the path they are taking."
He believes markets will do well as ANC wins the 2019 election and Ramaphosa remains the president of South Africa.
"As long as the president remains Cyril Ramaphosa, the markets will be fine."
Listen to the audio for more.