DOWN TO GRADES

So what do we say, South Africa?

Against the backdrop of S&P’s “steady as she goes” decision, we have won a reprieve. That is until December 2016. Remember, we still have Fitch to come and if I was a rumour-monger, I would say they exited SA early this year in order to deliver bad news from afar.  But, that would be churlish as Rating agencies are particularly circumspect before they deliver judgements upon economies, especially those that result in sub-investment grade. As I recall we will have their decision within a month.

Who’ve we got to thank? Not Boland Bank but two institutions. The one is Pravin Gordhan and his Treasury team who must have done an amazing job in the past 6 months to avert a certain downgrade. Recovering from Nenegate, straight into Budget 2016/7, navigating Guptagate and all the speculation around it and then walking through the fire with the Hawks and their implication. What a feat for Treasury to whom we owe a debt of gratitude.

The other is Business. Thank goodness that in December 2015, they rallied around the change of mind about David van Rooyen and began what may prove to be the best Public Private Partnership [PPP] in our modern economic history. The teams that volunteered to work with government must have laid the ground for solid feedback on growth, labour and jobs to be positioned with S&P. Who knows but that in these early stages, we are not laying the foundation for progressive growth targets with the necessary compromise between Labour and Business so as to achieve meaningful employment in the balance of the year and beyond?

Of course, there were those of us [even me if I’m honest] that wondered if we could avoid the downgrade. On the back of Friday the 3rd’s news, many have said, “Well, we still have to get through December”. Let me tell you, if you had given me “stay as you are but prove yourself” as an outcome on Thursday, I would have taken it with both hands. We can face Fitch with new confidence and assuredness that we have the presentation, the evidence and the support to remain as is and work forward.

The great thing now is that we have a fighting chance. And we can come out on top. Many have referred to the Social Compact and this era could be the very galvanization that we need to find Government, Labour and Business around the table.

One thing we know is that we trade in Hope and its cousin, Confidence. With a market happily over 54000 and a Rand smilingly below R15, we have early stage Confidence. For you and I in the property industry, Confidence = Sales.

It’s a short, sweet note, this blog. Let’s hope Fitch is convinced we have the teams and mettle to improve and the wisdom to focus while we vote. Then they leave us “as is” to get on with being better by yearend. And with that decision made, that our market enjoys a fillip going into the 3rd quarter as we shrug off the negativity with a sense that all will be well.

Wishful thinking or Reality? Like Ford said: “If you think you can or you think you can’t, you’re right.” Let’s trust we’re going to surprise ourselves. And in any case, surprize yourself in the second half of 2016.

 

Yours in Property,

Jack Trevena