S&P Global Ratings nominates its top risks for Asia Pacific in 2018 and makes some projections about the region’s debt levels and credit conditions for the year ahead.
After years of talking about leverage, Beijing has finally begun to back up its words with actions. But S&P Global Ratings believes it is not doing enough to stem credit growth.
It’s too early to tell whether the recent stabilisation of credit quality at major Southeast Asian companies marks a shift towards more conservative balance sheets, according to S&P Global Ratings.
China’s resolve to rein in financial risks has strengthened since mid-2016 but success remains uncertain, says S&P Global Ratings. Chinese lenders' higher tolerance for weak stand-alone credit quality at SOEs means leverage may build to a higher level than in more market-oriented economies.
Interest rates, FX, politics, the property market and debt in China could all hit market prospects in the second half of 2017, S&P Global Ratings' Terry Chan says.
The Chinese local government financing vehicle could have been more proactive in managing its bond's financial covenants, S&P Global Ratings analysts say.
The yield gap between speculative- and investment-grade credits is narrowing in the offshore US dollar bond market for Chinese issuers, says S&P Global Ratings.
The new administration in Washington is the key source of uncertainty for the region but volatility closer to home also adds to the risk, writes Terry Chan of S&P Global Ratings.
Amid spikes in capital outflows, Chinese policymakers have three unpleasant options to choose from. Economists from S&P Global Ratings weigh up the cost of each.
