Moody's: Asian Liquidity Stress Index declines in March, reversing trend

Moody's Investors Service says that its Asian Liquidity Stress Index (Asian LSI) decreased to 22.0% in March from 23.3% in February.

"The index -- which decreases when speculative-grade liquidity appears to improve -- decreased to 22.0% in March, ending three consecutive months of increases," said Annalisa Di Chiara, a Moody's Vice President and Senior Analyst.

"The month-on-month decrease reflects an increase of two companies, to 118, in the high yield space and the decrease of one company to a total of 26 with Moody's lowest or weakest speculative-grade liquidity score of SGL-4," says Di Chiara.

"The reading for March remains well below the record high 37% reached during the fourth quarter of 2008 amid the global financial crisis and is just above the long-term rolling average (20%) and the trailing 12-month average (21.9%) for the index," says Di Chiara.

The liquidity sub-index for Chinese speculative-grade companies declined to 23.1% from 25.4% in February, according to the report.

The number of high-yield Chinese companies climbed to 65 from 63 in February. Meanwhile, the number with an SGL-4 score decreased by one to 15 in March from 16 in February.

China's high-yield property sub-index also decreased to 20.5% from 21.1% in February, with eight of 39 companies in the sub-sector having SGL-4 scores.

The Indonesian sub-index increased to 8.0% from 4.0% as the number of SGL-4 companies doubled to two whilst the number of speculative-grade Indonesian companies was unchanged at 25.

The Australian index, which does not factor into the Asian LSI, decreased for a fourth month, to 17.6% in March from 23.5% in February. The number of companies with an SGL-4 score declined by one to three, while the number of speculative-grade Australian companies was unchanged at 17.

Moody's had assigned speculative-grade ratings to 118 issuers in Asia (excluding Japan and Australia) covering $65.0 billion of rated debt by the end of March, versus 116 issuers and $64.3 billion of rated debt in February.

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