Connect with us

Banking

Moody’s outlook for APAC corporates remains negative in 2020

Moody’s Investors Service says in a new report that overall credit conditions for APAC non-financial companies will weaken in 2020

Pr News

Published

on

• While positive, the US-China trade agreement will not resolve core differences, dampening business sentiment globally 

• Easing fiscal and monetary policies by major central banks provide near-term liquidity, supporting credit and financial market stability

Moody’s Investors Service says in a new report that overall credit conditions for APAC non-financial companies will weaken in 2020 amid slowing economic growth, continued trade policy uncertainty and geopolitical disputes.

“Global economic growth will remain lackluster, with growth in the US and China decelerating to 1.7% and 5.8% respectively in 2020,”

Clara Lau, a Moody’s Group Credit Officer and Senior Vice President.

And although positive, the first-phase US-China trade agreement will not resolve the core differences between the two countries — in particular on future technology competition.

Thus, policy uncertainty will persist, dampening business and investment sentiment, and adversely affecting the earnings growth and profitability of corporates,” adds Lau.

Central banks to maintain accommodative monetary policies

That said, Moody’s expects major central banks, including the US Federal Reserve, the European Central Bank and the Bank of Japan, will maintain accommodative monetary policies to provide near-term liquidity, supporting growth as well as credit and financial market stability.

Moody’s further expects most rated companies will be better equipped than their industry peers to maintain access to funding and withstand negative economic developments, but funding conditions for weaker companies will tighten.

Ratings with negative implications in Moody’s Asia Pacific non-financial corporate portfolio rose to 17% at the end of 2019 from 10% at the end of 2018.

As a result, the share of ratings with a stable outlook declined to 79% at the end of 2019 from 85% at the end of 2018, a record low since 2016. Across sectors, the automotive industry will be under the most pressure.

The share of ratings with negative implications was 41% at the end of 2019. In 2019, the rating trend for Moody’s-rated APAC corporate portfolio was negative as the trend notably worsened in Q3 2019. There were 128 negative and 48 positive rating actions during the year, of which China (38), India (24) and Japan (21) were the three main contributors, accounting for over 60% of total negative actions.

Siam News Network includes top references news sites, Job Board, Business Directory and Classifieds Portal

Comments

Asean

12 Things to Know about the ASEAN Catalytic Green Finance Facility (ACGF)

The ACGF is an ASEAN Infrastructure Fund initiative managed by ADB’s Southeast Asia Department Innovation Hub. It helps Southeast Asian governments prepare and finance infrastructure projects promoting environmental sustainability and contributing to climate change goals.

Asian Development Bank

Published

on

Southeast Asia faces an infrastructure investment shortfall of more than $100 billion a year, which may have worsened amid the COVID-19 pandemic.

Loading...
(more…)

Continue Reading

Banking

Thai cabinet approves 350 billion baht Aid for COVID-hit Businesses

Thailand unveiled new measures to help small and medium COVID-hit businesses in the tourism industry hit by a liquidity crunch.

Olivier Languepin

Published

on

The Thai cabinet has approved assistance worth 350 billion baht($11 Billion) to help businesses affected by COVID-19 with soft loans and asset warehousing.

Loading...
(more…)

Continue Reading

Banking

APAC Banks to Face Portfolio Valuation Losses As Yields Rise

The latest data suggest that Fitch-rated banks in Hong Kong, India, Indonesia, Malaysia and Taiwan have the largest AFS securities portfolios, and display particular sensitivity to changes in yields.

Avatar

Published

on

Fitch Ratings-Hong Kong/Singapore-21 March 2021: A rise in yields for long-dated sovereign bonds will result in near-term losses for Asia-Pacific (APAC) banks as they recognise valuation changes on their available-for-sale (AFS) bond portfolios, but the capital impact should be manageable for most rated banks, says Fitch Ratings.

Loading...
(more…)

Continue Reading

Most Viewed

Subscribe via Email

Enter your email address to subscribe and receive notifications of new posts by email.

Join 13,957 other subscribers

Latest

Trending