Singapore, September 11, 2017 — 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.
Moody’s analysis is contained in its just-released monthly report titled
“Asian Liquidity Stress Index: Asian LSI decreases to 26.8% in August
from 28.5% in July”.
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%
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
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.