Moodys : stable outlook for south & SE Asian corporate and b

IQPlus - Moody's Investors Service says that the overall credit quality of non-financial corporates and financial institutions in South and Southeast Asia will be stable over the next 12 months.

"We believe the region can withstand the increased headwinds that are likely this year, including slower economic growth in China, the spillover effects of the US Federal Reserve scaling back on its bond-buying program, tighter global liquidity conditions and greater exchange rate volatility," says Michael Taylor, Moody's Managing Director and Chief Credit Officer for Asia Pacific.

On non-financial corporates in South and Southeast Asia, Moody's says the mstable outlook for firms in the region reflects Moody's expectation of a mstable credit environment in 2014, solid liquidity for most corporates rated by Moody's and stabilizing leverage.

Moody's points out that three quarters of all Asian corporates rated by Moody's carry stable rating outlooks.

In addition, Asia Pacific bond maturities in both domestic and cross-border markets in 2014 ($108 billion) are lower than the region's average yearly bond issuance in each of the last three years. Moreover, the vast majority (93%) of maturities are investment-grade, with speculative-grade maturities totaling just $8 billion this year.

"In the case of Singapore, real estate investment trusts should exhibit stable occupancy and rental rates, supported by a manageable pipeline of new supply across most segments, and proactive lease management to pre-commit rentals in advance of expiry," says Philipp Lotter, a Managing Director for Moody's Corporate Finance Group.

For neighboring Indonesia, Moody's overall stable outlook for non-financial corporates is driven by Moody's expectation that modest domestic growth will be supportive of key sectors such as telecoms, media and property, and general consumer spending.