Emerging market leaders are on the upgrade trail:Report

"Looking backward, these rating upgrades took place during a period of strong global growth, rising commodity prices, ample cross-border capital flows, and low real interest rates--an environment particularly favorable to most emerging market sovereigns," says Standard & Poor's credit analyst John Chambers, chairman of the Sovereign Ratings committee.

"Despite a less-benign external environment, sovereign upgrades should continue to exceed downgrades in the near term, as positive outlooks on ratings of emerging market sovereigns outnumber negative outlooks nine to two." Trends in the subset of emerging market sovereigns also occur at the level of the full set of sovereigns rated by Standard & Poor's, he added.

The article is part of a special report, "Emerging Markets: Changing The Rules Of The Game," published on RatingsDirect, the real-time, Web-based source for Standard & Poor's credit ratings, research, and risk analysis, and in the Sept. 13, 2006, issue of Standard & Poor's CreditWeek.

The definitions of "emerging market" and "developing country" may need to be updated or, in some cases, the terms entirely eliminated given what appears to be sustainable economic growth in many of the world's poorer countries, particularly in their private sectors, the special report concludes. The developing countries together now account for two-thirds of world economic growth. Overall, Asian countries are the leaders, but many non-Asian economies are also booming.

In advance of this year's annual meeting of the World Bank and International Monetary Fund in Singapore, Standard & Poor's asked 16 of its senior economists and credit and index analysts to examine the broad emerging market landscape, including the roles that government regulations on investment, public/private partnerships, structured finance, and project financing are playing to boost GDP development. For more information and video commentary by the authors, visit: www.standardandpoors.com

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