Singapore — Moody’s Investors Service says that its Asian Liquidity Stress Indicator (Asian LSI) increased in September to 27.3% from 26.8% in August.
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 increases when speculative-grade liquidity deteriorates.
“The reading for September remains above the long-term average of 23.0%, highlighting that weak liquidity remains an issue for some companies in Asia,” says Brian Grieser, a Moody’s Vice President and Senior Credit Officer.
The number of rated high-yield companies with our weakest speculative-grade liquidity score (SGL-4) increased to 39 from 37 while the total number of rated high-yield companies increased to 143 from 138.
Moody’s analysis is contained in its just-released monthly report titled “Asian Liquidity Stress Indicator: Asian LSI increases to 27.3% in September from 26.8% in August”.
“Asian high-yield issuance maintained its robust pace in September with $1.1 billion of new bonds issued, raising the year-to-date total to a record $30.7 billion,” says Grieser.
The Moody’s report points out that the liquidity stress sub-indicator for North Asian high-yield companies increased to 27.2% in September from 25.0% in August.
Within this portfolio, the Chinese sub-indicator increased to 28.0% from 25.6%. The Chinese high-yield property sub-indicator increased to 15.6% from 9.5%, and the Chinese high-yield industrials sub-indicator decreased to 43.2% from 44.4%.
The liquidity stress sub-indicator for South and Southeast Asian high-yield companies decreased to 27.5% in September from 30.0% in August. The Indonesian sub-indicator fell to 24.0% in September from 29.2% in August.