Tuesday, 7 February 2017

Asian liquidity stress index improves to 29.4% in January

Ripples Advisory Private Limited, Indore @9303093093

Moody's Investors Service, a global rating agency, has said that its Asian Liquidity Stress Index (Asian LSI) fell for the second consecutive month in January 2017, registering 29.4 per cent a slight improvement from 30.3 per cent in December 2016. "The Asian LSI fell to 29.4 per cent largely due to an increase in the number of Moody's-rated high-yield companies to 126 from 122 January but also reflects the second consecutive month showing improvement in the index and fifth consecutive month it is below the trailing 12-month average of 31.8 per cent," says Brian Grieser, a Moody's Vice President and Senior Analyst.

The index measures the percentage of high-yield companies with SGL-4 scores and increases when speculative-grade liquidity appears to deteriorate. "However, the Asian LSI remains above the long-term average of 22.7 per cent, highlighting the ongoing weakness in corporate liquidity profiles across Asia" adds Grieser. Moody's report points out that in January 2017, Moody's downgraded three high-yield issuers and there was one fallen angel, a term which denotes a company which was downgraded from an investment-grade to a non-investment grade rating.

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