(Editor’s note: Given continuing investor interest in the 2014 credit outlook for Asia-Pacific corporates, this article collates our recent published responses to frequently asked investor questions on Asia-Pacific corporates generally and key sectors specifically.)
Asia-Pacific’s issuers collectively breathed a sigh of relief in late 2013 as the risks of even slower regional economic growth and continuing financial market volatility seemed to be subsiding (see “Asia-Pacific Credit Outlook 2014: A Sigh Of Relief As Growth And Market Risks Subside,” Dec. 10, 2013). The narrowing of the two main risks during 2013 contributed to only a modest pullback in the pace of GDP growth in the region, including China’s, in line with Standard & Poor’s Ratings Services’ base-case scenario (see “Credit Conditions: Asia-Pacific Growth Is Mostly Stable, But Some Lagging Credit Risks Remain For 2014,” Dec. 10, 2013). In fact, China’s growth has stabilized at about the authorities’ target of 7.5%, and the prospect of a hard landing in the near term is increasingly unlikely. Furthermore, capital outflows in the region stemming from speculation about the U.S. Federal Reserve’s tapering of asset purchases (“QE”, or quantitative easing) have taken a breather for now. The local currencies of India and Indonesia, in particular, endured some turmoil when such speculation was rife in markets.