Asian Liquidity Stress Index Declines Slightly to 21%

Moody's Investors Service's Asian Liquidity Stress Index has declined slightly to 21.0% in October from 21.3% in September.

The decline, the fifth in as many months, came as the net number of rated high-yield companies with Moody's weakest speculative-grade liquidity score (SGL-4) remained at 26 and the number of rated high-yield companies decreased by two to 124.

"The index -- which increases when speculative-grade liquidity appears to decrease -- remains well below the record high of 37.0% reached during the fourth quarter of 2008 amid the global financial crisis," says Annalisa Di Chiara, a Moody's Vice President and Senior Analyst.

"It is a bit above the index's long-term rolling average of 20.3% but still slightly below the trailing-12-month average of 22.1%," adds Di Chiara.

The liquidity sub-index for Chinese speculative-grade companies was unchanged at 20.0%, while the number with SGL-4 scores was also unchanged at 13. In addition, the number of high-yield Chinese companies remained at 65.

Meanwhile, both China's high-yield property sub-index and China's high-yield industrial sub-index were unchanged at 15.4% and 26.9%, respectively.

However, the Indonesian sub-index declined to 8.3% from 12.0% in September as the number of Indonesian companies with SGL-4 scores decreased by one to two while the total number of high-yield Indonesian companies decreased by one to 24.

Moody's downgraded the corporate family rating of one company in October and took no upgrade rating actions.

This compares to the quarterly downgrade/upgrade ratio of 1.14x for the third quarter.

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