Category Archives: Asia

Understanding Drivers Of Credit Risk

Since the introduction of Altman’s Z-score in 1968, there have been many statistical models that combine financial ratios, socio and macroeconomic factors with advanced mathematical techniques to estimate a company’s credit risk. In most instances, they will produce the same, or very comparable assessments; however, at times, due to the different “DNA” of the models, they can (and will) provide divergent credit risk assessments for the same companies.

In his latest whitepaper, Giorgio Baldassarri, Ph.D. discusses the differences and similarities of two of our fundamentals-based credit risk models, and how their outputs can help you distinguish the real drivers of risk.

2017 Retail Bankruptcies Set Record Pace – Which Companies Are Most At Risk?

2017 Retail Bankruptcies Set Record Pace – Which Companies Are Most At Risk?

If bankruptcies continue this year at their first-quarter pace, the Retail sector could join Oil & Gas as one of the most distressed industries of 2017. Already the number of bankruptcies year-to-date has come close to 2016’s total of 18.

In this article, we analyze the major trends converging to cause this march towards possible “Great Recession” credit risk levels in the retail markets, showcasing S&P Global Market Intelligence’s analysis of the 10 most vulnerable public US retail companies using our Probability of Default (PD) Fundamentals model.

How does increased credit risk in the retail sector affect your exposure?


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A growing number of institutional investors use factor insights, but few take a holistic approach toward integrating them in all stages of the investment process. That is important, given that exposure to systematic drivers, or factors, typically accounts for a significant proportion of portfolio return.

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The Absolute Return Letter, June 2017 Oil Price Target: $0 (by 2050)

‘Everything’ continues to decline – GDP growth, productivity growth, real wage growth, inflation, etc., and the Absolute Return Letter this month is dedicated to exploring energy’s role in this conundrum. We conclude that, unless mankind can come up with a cheaper energy form, GDP growth will ultimately turn negative. The only good news is that there is indeed a solution on the way, even if it is still many years away. The solution is not renewable energy, as you might suspect, but a technology called fusion energy. Enjoy the read!

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On 21 March 2017 the BSB held a morning event entitled Worthy of trust? Law, ethics and culture in banking, kindly hosted by the Bank of England. This panel discussion was chaired by BSB Chairman Dame Colette Bowe, and brought together three eminent speakers: Governor of the Bank of England Mark Carney, President and Chief Executive Officer of the Federal Reserve Bank of New York William C Dudley and the Rt. Hon. the Lord Thomas of Cwmgiedd, Lord Chief Justice of England and Wales, to explore an issue of shared importance; the relationship between law, ethics and culture in creating a banking sector that is worthy of trust.

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Credit Markets Rich But Not In A Bubble

The credit markets are sitting at rich valuations but are not in a bubble yet, Oaktree Capital’s Howard Marks told Bloomberg.

“You have to think of the world as rich, fair and cheap. We are in rich territory but I don’t think we are in bubble territory,” Marks, co-chairman and co-founder at Oaktree Capital, said on Bloomberg Daybreak: Americas.

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Why emerging market corporate debt should be in every bond portfolio

Sustainably higher rates of return in combination with, in historic terms, lower default risks – this is the profile that corporate bonds from emerging economies offer in contrast to the bonds of European and US firms. Corporate bonds denominated in US dollars should therefore be a strategic component of any bond portfolio. Within the increasingly mature and growing bond markets of emerging markets, the corporate bond sector offers investors additional diversification options and in many cases great investment opportunities with a higher earnings potential.

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Demand for credit market driving product evolution

An increasing demand for access to the credit market is driving innovation in credit-market products like ETFs, credit default swaps and futures, according to a report.

Approximately 90% of US-based credit investors interviewed by Greenwich Associates said their ability to trade has been impacted by reduced liquidity in the credit market.

Demand for credit exposure remains strong and has been driven by non-traditional credit participants’ recognition of the importance of credit for portfolio risk management, the report said.

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ECB looks into establishing benchmark lending index

ECB looks into establishing benchmark lending index

The European Central Bank announced that Eurosystem and it are ready to look into setting up a benchmark index of bank-to-bank lending rates, after the European Money Market Institute dropped a plan to make adjustments to the Euro Interbank Offered Rate. The benchmark would be based on data available to central banks, an ECB spokesman said.

Event Invitation: Delhi Roundtable: Green Bonds for Clean Energy: 19th May: Joint Event: Indian Green Bonds Council & USAID: Supported by Ministry of New & Renewable Energy & Climate Bonds Initiative

Invitation: Delhi Roundtable: Green Bonds for Clean Energy: 19th May: Joint Event: Indian Green Bonds Council & USAID: Supported by Ministry of New & Renewable Energy & Climate Bonds Initiative

You’re invited to join representatives from US AID PACE-D, the Indian Green Bonds Council, Issuers and Investors at this 2017 Delhi Roundtable.

Event Invitation: 

Growing Green Bonds for Clean Energy-Roundtable

When:  10:30am -14:30pm Friday 19th May 2017.

Where: Casuarina, India Habitat Centre, IHC Complex, Lodi Road, Delhi.

Registration: Email  and direct.


What’s it all about:

The Government of India has set a national clean energy target of 175 GW of renewable energy capacity by 2022, of which 57 GW has been installed so far.

Green Bonds have started playing a role in financing this capacity, and are expected to play a significant role in funding future renewable energy capacity addition.

The Roundtable will explore how an Indian green bonds market that benefits clean energy can be accelerated.

Hear about the experience of the pioneer Indian green bond issuers, the expectation of Indian institutional investors and about the support provided by USAID to prospective issuers under PACE-D TA program.


Is this Roundtable important for you?

Yes, if you are an asset owner, fund manager, bank, market regulator, fixed income or debt specialist, clean energy supplier or global infrastructure investor.


Registrations Now Open

A limited number of places are open to participate in the Roundtable.

Registrations can be made direct to  and


The Last Word

Don’t miss this chance to engage and discuss first hand the prospects for clean energy and green bonds investment to support India’s climate plans and 175GW by 2022 renewables target.

We’ll see you in Delhi on the 19th. 

Till next time,

Climate Bonds

Webinar : Who runs a bank today: The treasurer, the risk manager or the regulator?, May 15, 3pm UK

What is the value of ALM under the new regime of IRRBB?

Who runs a bank today: The treasurer, the risk manager or the regulator?

Date: May 15, 2017
Time: 3:00 p.m. UK

The latest guidelines illustrate the regulatory concerns of the current low interest rate environment. Our experts will discuss how interest rate management takes into account the treasury, the risk and the regulatory view.

Join this webinar and discover how you can:

  • Strategically position against interest rate movements by optimizing the funding mix.
  • Leverage your hedging strategies to effectively mitigate interest rate risk.
  • Understand the new regulatory approach, both by Basel and the EU, to interest rate risk with a “non-mandatory” standardized approach.
  • Understand technology impacts to achieve sustainable profitability under the new “dynamic earnings simulation and static value effect regime.”


  • Colin Johnson, Head of Prudential Risk, Charter Court Financial Services
  • Hadrien Van Der Vaeren, Manager, Avantage Reply
  • Marco Seeliger, Director Product Management, Ambit Focus, Risk and Compliance


  • Sven Ludwig, PRMIA Dusseldorf Regional Director and PRMIA Frankfurt Advisory Committee

Monetary Cycles and the Fixed Income Market – How Does the Slope Affect Returns?

In an earlier blog post, we provided a brief survey of recent monetary policy cycles in the U.S., showing that a higher Fed funds rate doesn’t necessarily affect the yield on Treasury bonds in the same way.  Policy rate changes affects short-term bond yields much more directly than longer-term yields (see Exhibit 1).  We argued that the difference in impact is likely a result of other macroeconomic factors that affect longer-term rates and segmentation in the market.  In this follow up note, we focus our attention on the shape of the yield curve and returns over various tightening cycles.

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Measuring ESG Improvement: Impact Reporting Versus Impact Measurement

As the importance of ESG investing grows, especially in the U.S., the ability to quantify and measure the impact of an ESG-incorporated portfolio will become more relevant.  In evaluating performance, traditional investors focus on standard metrics such as return, risk, tracking error, and other familiar modern portfolio theory statistics; however, ESG investors require all of these metrics plus more.  They seek ways to quantify the impact of their ESG investing; therefore, it’s beneficial to know the basics of how providers are reporting impact.

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Webinar : When the rubber meets the road. IFRS 9 Implementation, May 18, 830am IST

Please call in for this informative webinar that will address some of the key issues surrounding the effective implementation of IFRS 9 (International Financial Reporting Standard) that comes into effect in 2018 for most major APAC markets. Some of the topics to be discussed include:
  • How market participants are addressing the issues of IFRS 9 – a survey of the landscape in Asia
  • Balancing different approaches in calculating Expected Credit Losses
  • Lessons learned from Europe – approaches and challenges
  • Implementation considerations in Asia – case study

Watch Our Live-Stream: Risk Management for Commercial Real Estate Financial Markets, May 9, 2017 1:00 pm – 2:00 pm ET

Commercial real estate (CRE) assets have staged a remarkable recovery since the depths of the great financial crisis, buoyed by a growing economy, low interest rates, and intense competition on the lending side. With the economy at a cyclical peak, interest rates that have started to go up, and cap rates at an all-time low in several CRE sectors, the risks seem skewed to the downside.
If you can’t join us for our live event exploring how to manage CRE risk, tune in to our live-streamed lunch-time keynote presentations on May 9 at 1pm ET.
Register now


Survey of 500 Senior Executives Reveals the Corporate Crises Concerns Keeping Them Up at Night

Most crisis managers agree: The world became a riskier place to do business in 2016. With cyber crime on the rise, the volume of social media undermining their ability to manage reputation and political disruption causing uncertainty within boardrooms, last year presented a minefield of risks. And it’s only to get worse over the next three years managers believe.

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Webinar : Does a Particular Phase of an Economic Cycle Impact Corporate Credit Quality? Monday, 24th April 2017 India: 8:30 a.m. IST

Please join us for an informative Webinar to discuss recent research findings on How the Economic Cycle Drives Changes in Sectoral Credit Quality.

Paul Gruenwald, Chief Economist, Asia-Pacific, S&P Global Ratings and Paul Bishop, Director, Credit Analytics, S&P Global Market Intelligence will speak on the following topics:

  • The impact the economic cycle has on sectoral corporate credit quality
  • The sectors in the developed Asia-Pacific markets that have the highest fluctuations in credit quality based on a particular phase of the economic cycle
  • Current credit quality trends in Asia-Pacific markets and how to identify credit risk on a country and industry level using Probability of Default analysis

Date: Monday, 24th April 2017, Stay informed. Stay ahead. Register today!

India:  8:30 a.m. – 9:30 a.m.

China/Hong Kong/Malaysia/Singapore/Taiwan/Philippines:  11:00 a.m. – 12:00 p.m.

Japan/Korea:  12:00 p.m. – 13:00 p.m.

Sydney:  13:00 p.m. – 14:00 p.m

Stay informed. Stay ahead. Register today!


Paul Gruenwald
Chief APAC Economist
S&P Global Ratings

Paul Gruenwald is the Chief Asia-Pacific Economist at S&P Global Ratings. Based in Singapore, he leads the economic research agenda and serves as the primary spokesperson on macro-economic matters across the region.

Before joining S&P Global Ratings, Paul spent almost five years at Australia and New Zealand Banking Group (ANZ) as the Asia-Pacific Chief Economist, where he was responsible for helping set and direct ANZ’s Asian and global economic research agenda, as well as building the bank’s economic research efforts and profile in the region. Previously, Paul worked at the International Monetary Fund (IMF) for nearly 16 years, where he led the team producing the IMF’s Asian regional outlook reports. He was also the IMF Resident Representative to Hong Kong and Korea, the Deputy Chief of the China Division, and the country desk officer for Australia.

Paul has a Ph.D. in Economics from Columbia University and a bachelor’s degree in Economics/Mathematics from the University of Texas.

Vishrut Rana
APAC Economist
S&P Global Ratings

Vishrut is Asia-Pacific Economist at S&P Global Rating. He furthers the team’s research on credit and its interlinkages with the macroeconomy. He supports the team’s role in analyzing key macroeconomic developments in the region.

Prior to S&P Global, Vishrut was with the Centre for Research on the Economics of Ageing at Singapore Management University as a Research Associate. Vishrut recently completed his Ph.D. in Economics from Singapore Management University, where his research focused on business cycles, credit and its interaction with the economy, and financial intermediation.

Paul Bishop
Director, Credit Analytics
S&P Global Market Intelligence

Paul Bishop is a Director in S&P Global Market Intelligence’s Credit Analytics team, based in Singapore. He is the Product Lead for Credit Analytics Products in APAC. Paul has experience as a product manager in the credit and counterparty risk space and was previously the Product Manager for Ratings & Credit Content in EMEA, based in London. Prior to this Paul focused on market strategy covering Investment & Commercial Banks, Private Equity and Credit Markets. Before working at S&P Global, Paul was a Private Equity analyst focusing on the infrastructure asset class.

Clemens Thym
Managing Director, Asia Pacific
S&P Global Market Intelligence

Clemens Thym is Managing Director of S&P Global Market Intelligence in Asia Pacific, based in Hong Kong. He is responsible for Risk Services, covering regional product and market development for ratings and credit data, research and analytics in Asia Pacific across the buy and sell side, lenders and corporates. He previously managed the S&P Capital IQ Desktop business and before that Standard & Poor’s Risk Solutions in Asia Pacific, where he helped lenders in China, Japan, Hong Kong, Singapore, Australia and other markets to develop, validate or enhance internal rating systems across a broad range of asset classes.

Clemens has extensive experience in credit analytics and their application to institutions in developed and emerging economies. Clemens is a thought leader and active speaker at conferences on various subjects of credit risk.

Clemens joined Standard & Poor’s Risk Solutions in 2001 in London. Prior to that, Clemens was a management consultant for with PricewaterhouseCoopers in Frankfurt where he was responsible for credit risk management solutions and seminars on this subject as well as the assessment of the impact of the new Basel accord on banks. He conducted various projects as project manager or team leader in European wide projects.

Clemens holds a Master of International Economics and Business of the University of Innsbruck, Austria in a joint program with the University of New Orleans, USA.

Asian Fixed Income: Continuing Rally for Indonesian Bonds

Indonesian bonds, as tracked by the S&P Indonesia Bond Index, gained 5.59% YTD as of April 5, 2017. This is a continuation of the strong growth trend observed in 2016, when the index increased 13.7% owing to the Bank Indonesia’s cut in interest rates on six occasions throughout the year. Indonesia has been one of the top three best-performing countries tracked by the S&P Pan Asia Bond Index over the past three years. Both equities and bonds have been performing well on the basis of solid economic fundamentals.

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