Traders Downplaying S. Africa Credit Risk Should Heed Turkey
- Reasons for Turkey downgrade apply to South Africa: Informa
- CDS spreads at lowest in 13 months ignoring the risks
Foreign currency exchange rates are displayed on a digital board outside a bureau de change in Istanbul.
Photographer: Miguel Angel Sanchez/BloombergThis article is for subscribers only.
The erosion of Turkey’s creditworthiness is a warning signal for South Africa, and investors are ignoring it, according to Informa Financial Markets.
The cost of insuring the country’s debt against non-payment dropped to the lowest in 13 months this week, even as a funding crisis at Eskom Holdings SOC Ltd. strains government finances while the economy struggles to recover from the worst quarterly contraction since the 2008 financial crisis.