Auto, Retail and Gaming Seen as Hardest Hit Sectors in Region
AKP Phnom Penh, April 20, 2020 --
Moody’s Investors Service says its negative outlooks for non-financial companies in the Asia-Pacific region are dominated by the auto, retail and gaming sectors.
In a report released in Hong Kong on Monday, the US rating agency said credit trends in the region would “remain negative” in 2020.
“The coronavirus pandemic has massively disrupted global economic growth and supply chains and pressures corporate credit quality,” it said.
Moody’s said 26 percent of its ratings for non-financial companies in the region had negative implications at the end of March — up from 17 percent at the end of December.
The share of ratings with stable outlooks slid from 79 percent to 71 percent over the same period.
“Auto companies, retailers and gaming sectors are the hardest hit with over 50 percent of the issuers having ratings with negative implications,” the report said.
Negative implications refers to company outlooks that are negative or credit ratings that are under review for possible downgrades.
In terms of rating actions, Moody’s said the trend for the non-financial companies it rates in the region was “overwhelmingly negative” in the three months to March.
During the quarter, the rating agency said it took 120 negative and 5 positive actions.
China accounted for 24 percent of the negative actions followed by Japan (21 percent), Australia and New Zealand (13 percent combined), South Korea (10 percent), India and Singapore (both 10 percent), Indonesia (6 percent) and Hong Kong (5 percent).
Auto parts assembly has been an increasingly important part of foreign investment in Cambodia in recent years, especially by Japanese auto companies in Thailand that have been shifting some operations here.
By Sao Da