After several tumultuous years, global sovereign creditworthiness is likely to continue stablizing in 2014, says Moody’s Investors Service in its just-published “2014 Outlook – Global Sovereigns: Credit Quality Stabilizing After Several Tumultuous Years”.
It’s going to be a rough ride for corporate and bank credit in the Asia-Pacific in the coming year. Credit conditions have generally weakened in the light of dampened economic prospects and turbulent financial markets. China’s economy has slowed more than previously expected, which is having a flow-on effect on other regional economies. At the same time, global financial markets are exhibiting more turbulence, with significant sell-offs in emerging markets
Thiam Hee Ng, Senior Economist with ADB’s Office of Regional Economic Integration, warns the global financial market turmoil that has led to volatile capital outflows will make infrastructure financing costlier and more difficult. He says the region should encourage more stable sources of funding such as pension funds to promote much needed financing.
Down but not out. Although Asia-Pacific’s pace of expansion has declined over the past few years or so, the region’s growth continues to be the highest in the world after the global financial crisis. Moreover, exports–the main growth engine in some economies–have waned. With ultra-low interest rates generated by major central banks, lending has surged in some Asian economies, providing–at least for now–an offset to weaker external demand. Add to this mix slower growth in the two Asian giants, China and India, and we believe the region is unlikely to return to pre-crisis growth even if the advanced economies–particularly the United States–recover smartly.
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Panel Discussion coverage organized during the launch of Certified Credit Research Certification (CCRA) certification program in Mumbai on September 17, 2013.
The Panelists included:
Mr. Biharilal Deora ( Principal Advisor, Credit Research Programs- AIWMI) – Moderator
Mr. Rajesh Mokashi (DMD -CARE Ratings)
Mr. G D Banga (GM Risk Management – SBI)
Mr. Vaibhav Karkhanis (Head – Credit KPO, JP Morgan)
Mr. Dinesh Balachandran (Research, SBI Mutual Fund)
In a surprise move, the RBI increased the repo rate by 25 bps and also eased the liquidity tightening measures invoked earlier in July. While the immediate impact will be straightening of the yield curve, it also signals that inflation targeting will remain a major objective of RBI.
While policy will be shaped by the inflation number as well as the Fed actions, we are still hopeful of a cut in interest rates of 25 bps in Q4 if inflation is under control (good harvest expected this time) and clarity obtained on Fed’s tapering programme.
Click below for the detailed analysis on the RBI Credit Policy.
S&P Dow Jones Indices invites you to this half-day complimentary seminar which has become Europe’s annual meeting point for commodity aficionados in less than a decade.
Join us and other leading industry professionals for an afternoon of education and networking opportunities. Take a front row seat to walk away with valuable insights into current trends and issues under the umbrella of who’s complaining, who’s hedging, who’s speculating, who’s to blame and finally, where do I go?
Our speakers will examine:
– What causes spikes in commodity prices and how regulation is impacting commodity investment in modern market times.
– Perspectives on what the speculators are doing versus who are the hedgers, and why the lines might not be so clear.
– What incidental factors are tipping the market and the limitations for producers and consumers?
– What’s driving the world’s demand economy today and where it might be heading.
– The latest techniques in managing commodity index exposures in potentially uncertain times.
The Top 10 Questions You Should ASk in Every Investment Grade Bond Offering
2013 Asia-Pacific Bank Outlook
Read more at Fitch: Rupee Impact Highest for Indian Downstream National Oil Companies
29 August 2013
Fitch Ratings has said that the depreciation of the Indian rupee has varying levels of implications for rated energy & utilities companies in India, but their ratings are not immediately affected. The risks to standalone financial profiles are highest for state-controlled petroleum marketing companies among the Indian energy sector issuers currently rated by Fitch.
Read more Fitch: Currency Slide Will Add to Indian Banks’ Woes
29 August 2013 : The sharp depreciation of the Indian rupee will add to credit pressures on Indian banks, says Fitch Ratings. The current economic slowdown is also likely to be deeper and longer than our baseline expectations, adding to the pressures already faced by the local banking sector.