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Credit Market Pulse - Special Asia Edition: September 2014

Credit Market Pulse is a publication for the credit risk industry that provides a holistic overview of the credit health of global capital markets.In this special issue, we focus on credit trends across countries and sectors within Asia.

Asia Pacific Risk Trends

  • In developed Asia, the median PD ranged from 0.05% (credit score = “a”) to 0.24% (credit score = bbb). In emerging Asia, the median PD ranged from 0.07% (credit score = a) to 3.73% (credit score = b).
  • In Thailand, the SET100 index rebounded 26.0% from its lows in January 2014 when anti-government protests disrupted the general elections on February 2014, which indicates an improvement in market sentiment as political uncertainty was resolved.

Sector Credit Trends in Asia

  • Credit quality in Asia improved this year by two notches, equivalent to the PDs of the S&P Pan Asia Broad Market Index decreasing from 0.68% (bb+) to 0.23% (bbb).
  • PDs for most sectors were the weakest in August 2013 (PD = 0.98%, credit score = “bb”) and April 2014 (PD = 0.71%, credit score = “bb+”), corresponding to the months the S&P Pan Asia BMI index was 7%-9% off their 90-day highs.
  • Energy was the sector with the highest risk in Asia (PD = 0.50%, credit score = bbb-), due to weaker oil prices in August and potential concerns about a slowdown in China and Europe.

Movers and Shakers

  • The biggest individual movers in credit risk in Developed Asia (based on implied credit scores) included SBI Mortgage Co., Ltd. (KOSE:A950100) and Bank of Japan (JASDAQ: 8301)
  • And the biggest movers in Emerging Asia included Krungthai Card Public Co LTd (SET:KTC) and Rajesh Exports Ltd (BSA:531500)

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