Fintech in Southeast Asia is gaining investor focus as fundraising levels reach record highs. The region’s young, underbanked population has driven a boom in fintech adoption. Fitch Ratings’ non-bank financial institutions analyst Elaine Koh discusses the sector’s likely evolution in the region.
Large corporations are increasingly required to make better ESG disclosures in the key markets in Asia, enabling investors to better assess ESG risk exposures and issuers to potentially lower borrowing costs.
Fitch Ratings revised upward the assessment for China’s bank operating environment in May 2021, to ‘bbb-’/positive from ‘bb+’/stable. Grace Wu from Fitch’s Greater China Banks team discusses how an improved operating environment has a positive impact on banks’ standalone credit profiles.
Contracted sales of Chinese property developers have largely recovered since the onset of the coronavirus pandemic. Nationwide monthly sales declined by up to 35% at the pandemic’s peak in February 2020 when the government ordered most sales offices to shut, but have since rebounded. Monthly sales growth turned positive in year-on-year terms since May 2020, and cumulative nationwide contracted sales up to September 2020 were 6% higher than in the same period in 2019.
Capital markets in China remain underdeveloped when compared with global peers, despite rapid progress over the last decade. Heavy reliance on indirect finance, evolving regulatory and legal frameworks, and visible government interventions highlight capital markets' weakness in terms of depth and breadth. Fitch Ratings believes ongoing regulatory reforms could strengthen the capital markets framework and thus sustain further development, improving financial system stability and capital mobility.
Local-government financing vehicles have been one of the fastest growing sectors for G3 bonds. Fitch Ratings’ international public finance team’s Terry Gao, Samuel Kwok and Ark Huang reveal their outlook for this sector in 2019.