Fitch: Weak recovery in South Africa

Fitch Ratings said the liquidity profiles of rated Southern African corporate issuers are adequate for the rest of this year, but are exposed to a weak economic recovery over the next two years.

The liquidity of state-owned enterprises and issuers in the mining sector is considered weaker than that of the broader corporate sector, Fitch said.

This is on the back of high capital expenditure for state-owned entities, the agency said, and generally weaker free cash flow generation and greater cyclicality in the mining sector.

The southern Africa region continues to be plagued by challenging trading conditions on both the domestic and international front, Fitch said, and constrained financial markets.

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