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.

Suggested Articles

Some of you might have already been aware of the news that Questex—with the aim to focus on event business—will shut down permanently all media brands in Asia…

Some advice for transitioning into an advisory role

Global risks are intensifying but the collective will to tackle them appears to be lacking. Check out this report for areas of concern