Moody's: Asian Liquidity Stress Index Falls in November

Moody's Investors Service says that its Asian Liquidity Stress Index (Asian LSI) declined to 19.0% in November from 19.7% in October.


"The index, which decreases when speculative-grade liquidity appears to increase, is at its lowest level since July 2012, when it was 16.8%," says Laura Acres, a Moody's Senior Vice President.


"The change reflects a decrease to 22 from 23 in the net number of companies with our lowest (weakest) speculative-grade liquidity score (SGL-4) and a decrease to 116 from 117 in the total number of high-yield companies," says Acres.


Acres  notes the index remains below both the recent high of 29.1% from October 2012 and the record high of 37% reached during fourth quarter of 2008 amid the global financial crisis, with the reading now in line with the long-term rolling average for the Asian LSI.


The liquidity sub-index for Chinese speculative-grade companies was little changed at 20.3% in November compared with 20.0% in October, according to the report.


The number of high-yield Chinese companies decreased to 64 from 65.


Meanwhile, the number with an SGL-4 score was unchanged at 13, but there was some intra-movement in the underlying composition of the 13 issuers.


China's high-yield property index remained at 18.4% with seven of the 38 companies in the sub-sector having an SGL-4 score.


The Indonesian sub-index was also unchanged at 3.8% in November, equivalent to just one issuer out of 26 rated high-yield corporates with Moody's weakest liquidity measure.


Indonesian corporate liquidity remains stronger than the other Asian-based sub-indexes because Indonesian issuers have been able to access the domestic and regional bank markets to arrange committed, term-funding.


The Australian index, which does not factor into the Asian LSI, jumped to 33.3% in November from 23.5% in October as the number of high-yield Australian companies decreased to 15 from 17, and the number of those with an SGL-4 score rose by one to five.


Moody's had assigned speculative-grade ratings to 116 issuers in Asia (excluding Japan and Australia) covering $61.5 billion of rated debt by the end of November, versus 117 issuers and $60.7 billion of rated debt in October.

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