Moody's: Asian Liquidity Stress Index rises to 22.6% in January

Moody's Investors Service says that its Asian Liquidity Stress Index rose slightly to 22.6% in January from 21.8% in December.

The index rose as the net number of rated high-yield companies with Moody's weakest speculative-grade liquidity (SGL-4) scores increased to 28 while the number of rated high-yield companies remained at 124.

"The index -- which increases when speculative-grade liquidity appears to decrease -- remains well below the record high of 37.0% reached during the 4Q 2008 amid the global financial crisis," says Annalisa Di Chiara, a Moody's Vice President and Senior Analyst.

"It is a above the index's long-term rolling average of 20.3% and its trailing 12-month average of 22.4%," adds Di Chiara."

All Chinese readings rose in January. The liquidity sub-index for Chinese speculative-grade companies jumped to 26.6% from 23.1% as the number of Chinese companies with SGL-4 scores increased to 17 from 15 and the total number of high-yield Chinese companies decreased to 64 from 65.

And China's high-yield property sub-index rose to 20.5% from 17.9%, while the Chinese high-yield industrial sub-index climbed to 36.0% from 30.8%, reflecting the addition of two issuers to the SGL-4 grouping as the number of industrial issuers declined by one to 25.

At the same time, the Indonesian sub-index increased to 8.7% from 8.3% as the number of Indonesian companies with an SGL-4 score remained at two and the total number of high-yield Indonesian companies decreased by one to 23, following the withdrawal of one CFR.

Finally, downgrades continued to predominate as reflected in a downgrade/upgrade ratio of 3.0x in January. This is slightly below the quarterly ratio of 3.5x for Q4 2014, but remains high relative to previous periods. Negative ratings actions were concentrated in the commodities related (coal, oil and steel) and China property sectors.

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