SINGAPORE: The rating trend for non-financial corporates in Asia Pacific (ex-Japan) was stable in the second quarter (2Q) of this year, said Moody’s Investors Service.
This was driven mainly by the stabilisation of the rating outlooks for Chinese property companies and the better-than-expected performance of Indonesian developers, it said.
Its group credit officer, Clara Lau said, “We expect the stable rating trend to continue for the rest of 2013, given our expectation that China’s gross domestic product (GDP) will grow 7.0 per cent to eight per cent during 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.”
Lau was speaking about a just-released Moody’s report titled ‘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 outlooks edged up slightly as of end-June 2013 to 75 per cent, while the share of ratings with negative implications declined slightly to 18 per cent.
However, headwinds such as tightening liquidity and slowing economic growth in China could affect the stable rating trend.
Moreover, Moody’s said 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 said.
For Japanese non-financial corporates, the negative rating trend eased somewhat in Q2 2013, despite the sluggish economy and the uncertainty related to global economic growth.
“We expect the pressure to continue easing during the rest of 2013, as Japanese corporates benefit from the weakened yen and demand arising from domestic reconstruction investments,” she added. — Bernama