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Stable rating trend for Asian firms at mid-year: Moody's
Moody's Investors Service has said that the rating trend for non-financial corporates in Asia Pacific (ex-Japan) was stable in 2Q 2013, driven mainly by the stabilization of the rating outlooks for Chinese property companies and the better-than-expected performance of Indonesian developers
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oody's Investors Service has said that the rating trend for non-financial corporates in Asia Pacific (ex-Japan) was stable in 2Q 2013, driven mainly by the stabilization of the rating outlooks for Chinese property companies and the better-than-expected performance of Indonesian developers.
"We expect the stable rating trend to continue for the rest of 2013, given our expectation that China's GDP will grow 7 percent to 8 percent the year, the overall improvement in the liquidity profiles of Asian issuers, and our expectation that the availability of liquidity and credit will remain sufficient despite some tightening in China," a Moody's Group credit officer, Clara Lau, said in an official release.
Lau was speaking about a just-released Moody's report entitled Stable Rating Trend for Asian Corporates at Mid-Year; Negative Trends Easing in Japan.
According to the report, the share of Asian corporate ratings with stable outlook edged up slightly as of end-June 2013 to 75 percent, while the share of ratings with negative implications declined slightly to 18 percent.
However, headwinds, such as tightening liquidity and slowing economic growth in China could affect the stable ratings trend. Moreover, uncertainty related to the timing of the end of the quantitative easing measures by the US government could result in volatility in the credit markets.
"We expect metals and mining, commodity-related and consumer electronics companies to remain under pressure in the face of weakening demand from China," Lau says.
