Page 5 - Fitch Ratings

Fitch upgrades Turkey's sovereign rating to B+ on tighter monetary policies

"Upgrade reflects increased confidence in the durability and effectiveness of policies implemented since the pivot in June 2023," Fitch said

Uncertain political situation in Pakistan poses threat to IMF deal: Fitch

Fitch further noted country's vulnerable external position meant that securing financing from multilateral and bilateral partners would an urgent issues on the agenda for the next govt

Rating agencies cautious on India's sovereign credit profile post-Budget

Fitch Ratings said that though the interim budget presented was broadly in line with the expectations, it won't change the sovereign credit profile from 'BBB-' with a stable outlook

Deficit reduction will stabilise debt-to-GDP ratio over medium term: Fitch

Fitch Ratings on Friday said the slightly faster pace of fiscal deficit reduction does not significantly change India's sovereign credit profile but the government's emphasis on deficit reduction will help to stabilise the debt-to-GDP ratio over the medium term. In a post budget commentary, Fitch Ratings Director, Sovereign Ratings, Jeremy Zook said over the next five years, India's government debt-to-GDP ratio would be broadly stable at just above 80 per cent of GDP. This is based on a continued path of gradual deficit reduction, as well as robust nominal growth of around 10.5 per cent of GDP. In the interim Budget 2024-25, presented in Parliament on Thursday, the government revised lower its current year fiscal deficit to 5.8 per cent from 5.9 per cent budgeted earlier. The deficit, which is the gap between the government's revenue and expenditure, will come down to 5.1 per cent in 2024-25 and further to 4.5 per cent by 2025-26. Fitch said this demonstrates a firm desire to adher

Fitch affirms India's long-term FX rating at 'BBB-' with stable outlook

'India is poised to remain one of the fastest-growing countries globally in the next few years as the robust economic momentum is proving resilient,' the ratings agency said

Fitch assigns 'BB(EXP)' rating to Shriram Finance's proposed US bonds issue

Global rating agency Fitch on Monday assigned the 'BB(EXP)' rating to Shriram Finance Limited's proposed US dollar-denominated senior secured bonds. 'BB(EXP)' rating reflects that an issuer has some risk of default but is still a safer investment compared to others. The final rating is subject to the receipt of final documentation conforming to information already received, Fitch Ratings said in a statement. Shriram Finance will issue the proposed bonds in the international market under the Reserve Bank of India's external commercial borrowing framework. The company will issue proposed bonds under the USD 3.5 billion global medium-term-note programme, which was updated on December 29, 2023. The proposed bonds will carry a fixed-rate coupon payable semi-annually and secured by a fixed charge over specified accounts receivable in line with the company's domestic secured bonds.

India's economic growth to boost demand of corporates: Fitch Ratings

Leading credit rating firm Fitch Ratings expects that India's resilient economic growth will boost demand of the corporates. In its latest research report on 'India Corporates: Sector Trends 2024', Fitch said that this is a sequel to the robust performance of the corporates in 2023 and will offset weakness from slowing growth in the key overseas markets. Rising demand and easing input cost pressure should boost margins of the corporates in the next financial year, Fitch said. Fitch said that with strong domestic demand growth, it is expected that India will be among the world's fastest-growing countries, with resilient GDP growth of 6.5 per cent during the fiscal 2024-25. This is despite a challenging global backdrop and the cumulative impact of the recent monetary tightening, it said. Sectors like cement, electricity and petroleum products are expected to witness a strong demand with high-frequency data in 2023 sustained well above pre-COVID pandemic levels. Fitch said that Indi

Better profitability to support corporate rating headroom: Fitch Ratings

Profit margins of domestic companies are likely to swell by 290 basis points over FY23 levels, boosted by lower raw material costs and rising volume led by local demand, despite faster capacity additions in some industries, which will lead to their rating upgrades next fiscal, says an international rating agency. In a report on the domestic corporates in particular and the economy in general, Fitch Ratings Friday said it seems the profit margins of the corporates it rates jumping by 290 bps above the FY23 levels. But it was quick to warn that a sharp or sustained rise in energy prices, given the ongoing geo-political risks, presents downside risks to the projection. On the economy, it expects the country to be among the world's fastest-growing large sovereigns, with resilient GDP growth of 6.5 per cent in FY25, marginally down from a likely 6.9 per cent GDP print this fiscal. The higher growth will be buoyed by strong demand for cement, electricity and petroleum products. This alon

Lok Sabha elections: Will Modi govt return to power in 2024? Fitch answers

Lok Sabha elections 2024: The agency said that the size of the majority in the next Indian Parliament could influence the ambitiousness of the administration's reform agenda

Fractious politics can slow reforms, derail policymaking: Fitch Ratings

Fractious politics can slow reforms and derail policymaking, and contentious elections can encourage the prioritisation of short-term growth, Fitch Ratings said on Monday as a large number of nations go to the polls. In its Global Sovereigns Outlook 2024, Fitch highlighted that a large number of elections are scheduled in 2024, including Bangladesh, Croatia, Dominican Republic, El Salvador, India, Indonesia, Korea, Mexico, Pakistan, Panama, Romania, South Africa, Sri Lanka, Taiwan and the US. UK elections must be before the end of January 2025. "Fractious politics can slow reforms and derail policymaking, and contentious elections can encourage the prioritisation of short-term growth objectives over longer-term structural initiatives," it said. Fitch said lower inflation might not help incumbents much, given prices remain well above pre-pandemic levels in most countries. The international environment is marred by two major conflicts entering 2024, neither of which appears to be on

India's FY24 power demand to rise 7% amid strong industrial activity: Fitch

Fitch stated that the receivable position of generation companies (gencos) will continue improving in the near term

Healthy outlook: Banks profit rises 33.5% to Rs 77,564 crore in Q2

High credit offtake; lower credit costs boost bottom line

Indian banks' Viability Ratings to benefit from improved performance: Fitch

Indian banks' Viability Ratings (VR) will continue to benefit from improved operating conditions and performance in the near term, said a global rating agency. "We expect Issuer Default Ratings (IDRs) to remain stable across banks as they are driven by our expectation of extraordinary support from the Indian sovereign (BBB-/Stable), should there be a need," Fitch Ratings said in a statement. Two Indian banks' VRs were upgraded in 2023, with upside possible for several banks as Fitch expects the recent, better-than-expected, financial performance, mainly in asset quality and earnings, to be maintained, it said. The recent revision of the operating environment score to 'bb+' from 'bb' also supports the assessment, it said. Five of the eight Indian banks' VRs are in the 'bb' category, reflecting a moderate degree of financial strength, while the other three with VRs in the 'b' category are still weighed down by their risk profiles, weak financial metrics of the past and weaker ...

Fitch upgrades India's mid-term GDP growth forecast to 6.2% from 5.5%

Fitch blamed China for pulling down the estimate of 10 emerging countries to 4 per cent from 4.3 per cent earlier

Fitch Ratings upgrades ratings on Tata Steel to 'BBB-' with stable outlook

Fitch Ratings on Monday said it has upgraded its ratings on domestic steel player Tata Steel Ltd (TSL) to 'BBB-' with a stable outlook. It has also upgraded the rating on USD 1 billion notes issued by Tata Steel subsidiary ABJA Investment, the rating agency said in a statement. "Fitch Ratings has upgraded India-based Tata Steel Limited's (TSL) Issuer Default Rating (IDR) to 'BBB-', from 'BB+'. The Outlook is Stable. We have also upgraded the rating on the USD 1 billion notes due July 2024 issued by TSL's subsidiary, ABJA Investment Co. Pte. Ltd., and guaranteed by TSL, to 'BBB-', from 'BB+'," it added. The upgrade follows a revision in the company's stand-alone credit profile (SCP) to 'bb+', from 'bb', on the reduction in uncertainty and financial risk from its UK operations. In the UK, TSL will replace its blast furnaces with more cost-efficient and environment-friendly electric arc furnace (EAF)-based steelmaking capacity. Consequently, we expect the UK operations' cost ...

Marginal credit boost: Fitch on India's inclusion in JP Morgan's bond index

Fitch estimated that inclusion in the GBI-EM indexes could facilitate approximately $24 billion in passive inflows into government bonds between June 2024 and March 2025

Reliance Industries may transform into holding company: CreditSights

Oil-to-telecom conglomerate Reliance Industries Ltd may eventually transform into a holding company, with majority stakes in independent entities that operate the major business verticals, CreditSights, part of the Fitch Group, said on Monday. In a report on billionaire Mukesh Ambani's succession plans at Reliance, it said robust credit profile, aided by strong anticipated earnings outlooks for its telecom and retail segments, mitigate a poorer outlook for Reliance's downstream oil unit amid high crude oil prices and its elevated capex needs. Reliance recently shed more light on the conglomerate's business succession plans, when company chairman Mukesh Ambani announced that his three children - Akash, Isha and Anant - would be inducted into the firm's board of directors. Ambani said he would continue performing his duties as chairman and CEO for five more years. "We view the further progress in Ambani's succession plans favorably, considering key man risk has been a persisting conce

Fitch retains India's growth forecast at 6.3%, flags inflation risks

Fitch Ratings on Thursday retained India's growth forecast for the current fiscal at 6.3 per cent saying the Indian economy continues to show resilience despite tighter monetary policy and weakness in exports, but upped year-end inflation projection on El Nino threat. The Indian economy grew 7.8 per cent in the April-June quarter of current fiscal on strong services sector activity and robust demand. "The Indian economy continues to show resilience despite tighter monetary policy and weakness in exports, with growth outpacing other countries in the region," Fitch said, while projecting 6.3 per cent growth for current fiscal, and 6.5 per cent for next fiscal. In its September update of the Global Economic Outlook Fitch, however, said that high-frequency indicators suggest that the pace of growth in the July-September quarter is likely to moderate. Growth in the July-September quarter is likely to moderate as exports continue to weaken, credit growth flatlines and the Reserve Bank of

What more can India do to win over the Big Three sovereign rating agencies?

A high sovereign credit rating can raise a country's star among the global investor community; a low rating, indicating doubts over ability to repay debts, increases its financing costs

Rating agency Fitch cuts China's 2023 GDP growth forecast by 80 bps

Beijing eases down payments, mortgage rates in fresh stimulus move