Moody's: Asian Liquidity Stress Index decreases to 26.8% in August from 28.5% in July

Moody's Investors Service says that its Asian Liquidity Stress Index (Asian LSI) improved in August, decreasing to 26.8% from 28.5% in July 2017.

The Asian LSI measures the percentage of high-yield companies with SGL-4 scores as a proportion of high-yield corporate family ratings (CFRs) and decreases when speculative-grade liquidity improves.

"The reading remained above the long-term average of 23.0%, highlighting that weak liquidity is still a concern for many companies in Asia," says Brian Grieser, a Moody's Vice President and Senior Credit Officer.

"Since the peak reading of 34.2% in April 2016, the number of companies with the weakest score of SGL-4 has declined by four, while the total number of high-yield companies increased by eighteen," adds Grieser.

 

The Moody's report points out that the liquidity stress sub-index for North Asian high-yield companies decreased to 25.0% in August from 27.6% in July. Within this portfolio, the Chinese sub-index decreased to 25.6% from 28.6%.

Meanwhile, the Chinese high-yield property sub-index decreased to 9.5% from 9.8%, and the Chinese high-yield industrials sub-index decreased to 44.4% from 50%.

The liquidity stress sub-index for South and Southeast Asian high-yield companies remained at 30%, while the Indonesian sub-index remained at 26.1%.

Moody's further notes that the strong high-yield issuance momentum continued in August. Rated high-yield issuance totaled $4.4 billion in August, raising year-to-date issuance to a record level of $29.6 billion.

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