JAKARTA (TheInsiderStories)Moody’s Investors Service has launched the third edition of its Emerging Markets (EM) Chartbook, with a much-expanded level of coverage of sovereigns, as well as sub-sovereigns, corporates and financial institutions, when compared with the inaugural edition which debuted in September 2018.

Moody’s now rates 106 emerging market sovereigns and nearly 1,600 issuers from 71 EM countries. Issuers in the Asia Pacific (APAC) accounted for 35 percent of rated EM issuers, Latin America makes up 32 percent, while those in Emerging Europe and Africa/Middle East together account for 33 percent.

Denis Perevezentsev, a Moody’s Vice President and Senior Credit Officer, said pressures at the sovereign level, in particular in Argentina and Turkey, have had a meaningful impact on rating trends in global emerging markets over the past nine months, with downgrades outweighing upgrades across investment-grade and high-yield corporates.

“However, capital markets in EM continue to benefit from accommodative monetary policies around the globe, despite lingering risks of global trade wars and slowing economic growth, with Eurobond issuance over Q1-Q3 2019 exceeding total 2018 issuance,” he said.

Moody’s now rates 106 emerging market sovereigns — a figure which has seen consistent growth since 2004 when Moody’s rated just 63 — and 32 of these sovereigns have an investment-grade rating.

APAC issuers account for 35 percent of all rated EM issuers, with 58 percent from China. A total of 60 percent of the region’s issuers have investment-grade ratings, and over 83 percent have stable outlooks, while 11 percent of rated issuers from China have a negative bias.

The region’s issuers have also driven the growth in the EM Eurobond market since 2010, accounting for 49 percent of the US$490 billion issued over first until the third quarter of 2019.

APAC has been driving growth in EM rated non-financial corporates, and now accounts for 48 percent of this category, and China for 34 percent. Furthermore, 81 percent of non-financial corporates in APAC have stable outlooks, while the negative bias weakened to 13 percent in 3Q 2019 from 11 percent in 2018.

Written by Lexy Nantu, Email: lexy@theinsiderstories.com