The Asian LSI measures the percentage of high-yield companies with Moody's weakest speculative-grade liquidity score of SGL-4, when speculative-grade liquidity appears to improve for Asian high-yield issuers.
"The 25.2% Asian LSI reading in May was the lowest since August 2015, but remains above the long-term average of 22.8%, highlighting that weak liquidity is still a concern for many companies in Asia, despite improvements over the last six months," says Brian Grieser, a Moody's Vice President and Senior Credit Officer.
Moody's report points out that the Chinese high-yield property sub-index fell to a record low in May 2017, registering 7.5% from 10.0% the month before; the lowest level since Moody's began tracking the sub-index in 2010.
The liquidity stress sub-index for North Asian high-yield companies dropped to 24.7% in May from 25.0% in April. Within this portfolio, the Chinese sub-index fell to 25.4% from 25.7%. By contrast, the Chinese high-yield industrials sub-index rose to 48.4% from 46.7%.
As for the South and Southeast Asian sub-index, the index was unchanged at 26.1% month-on-month. And, the Indonesian sub-index remained at 22.7% over the same period.
Moody's explains that the strong high-yield issuance in 2017 continued to support improved liquidity for Asian issuers, with issuance totaling $3.1 billion for the month, bringing year-to-date issuance to $16.2 billion. The year-to-date issuance is already above the full-year issuance of $11.4 billion recorded in 2016.
Also Read
Roughly two-thirds of the bond proceeds between January and May 2017 have been used for refinancing upcoming maturities.
Powered by Capital Market - Live News
Disclaimer: No Business Standard Journalist was involved in creation of this content