Moody's Investors Service says that the overall outlook is stable for the power sector in Asia, excluding Japan, in 2014, thanks to supportive regulatory policies, which result in stable market structures and low probabilities of adverse adjustments to tariff structures or returns
oody's Investors Service says that the overall outlook is stable for the power sector in Asia, excluding Japan, in 2014, thanks to supportive regulatory policies, which result in stable market structures and low probabilities of adverse adjustments to tariff structures or returns.
However, the Indian power sector remains an outlier. Moody's outlook for the Indian market is negative in 2014, as it was in 2013, due to the structural challenges in the entire value chain.
On leverage, Moody's expects debt levels in the power industry across Asia, except Japan, to be stable over the next 12 to 18 months, supported by increasing cash flows from capacity additions and stable-to-declining fuel costs and despite high levels of capital expenditure.
Moody's conclusions were contained in a just-released report titled, 2014 Outlook: Asia (ex-Japan) Power Sector, Supportive Regulatory Policies Drive Stable Outlooks, But India Is an Outlier.
The report was co-authored by Mic Kang, a Moody's vice president and senior analyst, Ivan Chung, a Moody's vice president and senior credit officer, Ray Tay, a Moody's assistant vice president and analyst and Ivy Poon, a Moody's analyst.
Moody's report says the stable outlook for the power sectors in Hong Kong and Singapore was driven by supportive regulatory policies and a low likelihood of adverse adjustments to tariff structures or returns. In addition, offtaker and fuel supply risks are low.
On the power sectors in China, Indonesia, Korea, Malaysia and Thailand, Moody's report says while the stable outlook for these markets are also owing to supportive regulatory policies, such policies are less predictable than in Hong Kong and Singapore.
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