Moody's Asian Liquidity Stress Index

Economy April 05, 2014 00:00

By The Nation

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Moody's Investors Service says its Asian Liquidity Stress Index decreased to 22.0 per cent in March after being at 23.3 per cent in February.



“The index – which decreases when speculative-grade liquidity appears to improve – decreased to 22.0 per cent in March, ending three consecutive months of increases,” said Annalisa Di Chiara, a Moody’s vice president and senior analyst.

The month-on-month decrease reflected an increase of two companies to 118 in the high-yield space and the decrease of one company to a total of 26 with Moody’s lowest or weakest speculative-grade liquidity score of SGL-4, Di Chiara said. She was speaking on the release of Moody’s latest report on the index.

“The reading for March remains well below the record-high 37 per cent reached during the fourth quarter of 2008 amid the global financial crisis and is just above the long-term rolling average – 20 per cent – and the trailing 12-month average –21.9 per cent – for the index,” she said.

The liquidity sub-index for Chinese speculative-grade companies declined to 23.1 per cent from 25.4 per cent in February, according to the report.

The number of high-yield Chinese companies climbed to 65 from 63 in February. Meanwhile, the number with an SGL-4 score decreased by one to 15 in March from 16 in February.

China’s high-yield property sub-index also decreased to 20.5 per cent from 21.1 per cent in February, with eight of 39 companies in the sub-sector having SGL-4 scores.

The Indonesian sub-index increased to 8 per cent from 4 per cent as the number of SGL-4 companies doubled to two, while the number of speculative-grade Indonesian companies was unchanged at 25.

The Australian index, which does not factor into the Asian LSI, decreased for a fourth month to 17.6 per cent in March from 23.5 per cent in February. The number of companies with an SGL-4 score declined by one to three, while the number of speculative-grade Australian companies was unchanged at 17.

Moody’s had assigned speculative-grade ratings to 118 issuers in Asia (excluding Japan and Australia) covering US$65 billion of rated debt by the end of March, versus 116 issuers and $64.3 billion of rated debt in February.