SARAH BULLEN, Johannesburg | Monday 5.30pm.
THE Johannesburg Stock Exchange had a buoyant start to the week on Monday, moving higher on general goodwill after international credit rating service Moody’s Investor Services announced it is to retain South Africa’s investment grade credit rating. The news overshadowed even global frustration after the G7 grouping of the world’s richest nations on the weekend failed to come up with any decisive plan to deal with the global economic crisis.
After Moody’s notified the market three months ago that South Africa’s credit rating was being reassessed, it has been widely expected that it was set to downgrade the investment grade score.
Relief flooded into the bond market, pushing the R150 higher as it gained some steady ground from Friday’s close of 7,70% to a 7,15% yield. The R150 closed off its day’s best level of 17,00%. Deutsche Morgen Grenfell dealer Andr Crawford-Brunt said the positive sentiment spurred some short covering in the bond market, which in turn buoyed equity buying.
The financial and industrial indices had some fairly strong runs on the day, closing 2,04% and 1,34% higher respectively. Gold stock lost some ground as a result of some profit taking and a fall in the bullion price to $298,75, dealers said. The index closed just over 1% lower at 1270.
On the international front, Wall Street opened sharply down after a weekend meeting of the finance leaders of the G7 grouping of the world’s richest nations failed to come up with a plan to deal with the global economic crisis. Instead world leaders released a vague statement pledging to boost economic growth and help countries worst hit. The repo rate remained unchanged at 21,855% while the rand remained strong at around R6,06 to the dollar.