Bangkok--28 Jan--Moody's Investors
Moody's Investors Service says the outlook for most non-financial corporate sectors in Asia Pacific (ex-Japan and ex-Australia) is set to remain stable in 2010, as macro-economic and operating conditions continue to improve for most companies in the region.
"Moody's expects these Asian corporates to lead their Western counterparts in the extent of their recoveries as economic conditions in many Asian countries have proven more resilient than elsewhere," says Elizabeth Allen, a Moody's Vice President and Senior Credit Officer.
"Accordingly, Asian corporates have entered 2010 on a stronger footing than a year ago, reflecting the positive momentum started in 2H2009," says Allen.
Allen was speaking on the release of Moody's annual report on the outlook for Asian corporates over the next 12 months.
The report -- which was authored by Allen and other senior Moody's analysts in the region -- reviews likely conditions and drivers for all rated corporates in the region.
It also has specific commentary on 8 regional industries and their individual industry outlooks -- oil & gas (negative); Singapore commercial investment property (negative); Chinese property developers (stable); utilities (stable); telecom (stable); consumer products & retail (stable); gaming (stable); and technology and semiconductors (stable).
"Stable rating outlooks dominated as of December 2009, but until we see sustained improvements in credit profiles, we do not expect to observe a clear migration to positive rating actions across Moody's rated portfolio," adds Gary Lau, Moody's Managing Director for Corporate Finance in Asia.
"The key challenges for the Asian economy include the timing of the withdrawal of government stimulus polices and any unexpected decline in China's growth dynamics," says Lau. "Although we see a low probability of the latter happening, its effect on Asian corporates -- if it did happen -- would be profound."
The new Moody's report also discusses the improvement in the liquidity profiles of Asian corporates and notes that overall refinancing risks have normalized.
Generally, credit conditions in Asia have improved compared to a year ago and, as the equity, bond and bank markets have reopened since 2H2009, many corporates were able to refinance their debt and re-capitalize.
Looking ahead, Moody's expects corporates, especially investment grade issuers, to continue seizing opportunities to rebalance their debt maturities and take advantage of the favorable interest rate environment since the global financial markets can still be volatile.
Moody's report notes that Asian issuers raised just over USD10bn in 4Q2009 from the international debt capital markets to enhance their liquidity profiles.
The report is entitled Asia Pacific Corporate Outlook for 2010 -- The Worst is Over for Most. It can be found at www.moodys.com