Moody's: Asia Pacific non-financial corporate rating trend stabilizing

Moody's Investors Service says that the outlook on the ratings for Asia Pacific non-financial corporates in Moody's portfolio is stabilizing, with the share of ratings with negative implications falling to 26% at 31 March 2017 from 29% at 31 December 2016.

"In fact 1Q 2017 marked the first time since 2Q 2015 that the number of positive rating actions outpaced negative actions," says Clara Lau, a Moody's Group Credit Officer.

During 1Q 2017, there were 22 positive versus 19 negative rating actions. Excluding sovereign-related actions, total positive and negative actions were almost at par, with 18 positive and 19 negative actions. This situation is a notable improvement from that in 2016, when there were 48 positive versus 148 negative rating actions.

 

"The stabilizing trend reflects modest but stable global growth, on-target China economic growth, the bottoming of most commodity prices, and the continued access to market liquidity for Asian corporates," adds Lau.

Moody's report says that metals & mining issuers remained the most pressured, as reflected by the over 40% share of ratings for these companies with negative implications despite the bottoming of most commodity prices.

By region, Chinese corporates accounted for nine of the 22 positive rating actions in 1Q 2017, followed by Indonesian corporates, at five. For the 19 negative actions, eight involved Chinese corporates.

By industry, property developers were the active contributors to total rating actions, with five positive and six negative actions.

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