Nov 23, 2012

Malaysia - S&P expands coverage of Asean rating scale

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KUALA LUMPUR: Standard & Poor's Ratings Services has expanded coverage of its Asean regional rating scale to over 120 issuers, including Bursa Malaysia blue chip names like Petronas, Maybank and IOI.

A total of 15 issuers are from Malaysia mostly from the finance counters.

S&P said the expansion is to meet growing demand from investors participating in Southeast Asia's capital markets.

"The scale provides opinions of relative credit risk within an Asean context and is transparently mapped to S&P's global scale," it said in a statement from Singapore.

Singapore-based companies topped the list with 38, followed by Indonesia (27) and Thailand (23).

S&P's developed the scale in 2009 to support the growth and integration of capital markets in Asean countries.

"We have expanded coverage of our Asean regional scale because of increased investor demand and the ongoing strong growth of bond markets in Southeast Asia," said Yu-Tsung Chang, executive managing director and head of S&P's Asia-Pacific.

He said Asean local-currency bond issuance has significantly exceeded cross-border "G3" issuance in many markets, including Malaysia, Thailand and Singapore, with growing opportunities in Islamic finance.

Lim Hong Hin, who is deputy secretary-general of Asean, welcomed S&P's efforts to provide a credit benchmark specifically tailored for the Asean region.

S&P's said the Asean regional scale provides a credit assessment within an Asean context and is clearly marked with its own identifying prefix, "ax", and the main difference between the two scales concerns calibration and the basis of comparison.

The Asean regional scale includes both long- and short-term ratings. The highest long-term rating is "axAAA" and the highest short-term rating is "axA-1+".

Rupa Damodaran

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