PETALING JAYA: RAM Rating Services Bhd has assigned its
inaugural sovereign ratings of between AAA and BB1 to five Asean countries
Malaysia, Singapore, Indonesia, Thailand and the Philippines.
The ratings were assigned under
the new rating global and Asean scales launched by the agency as part of its
global initiative.
The two rating scales compared
and measured the best companies globally and in Asean, respectively, for their
credit worthiness their ability to pay on a timely and adequate manner.
RAM's rating scale ranges from
AAA to D, with a AAA-rated sovereign having superior capacity to meet its
financial obligations while a sovereign rated D means country is currently in
debt default.
The different rating categories
between AAA and D signify relatively weaker payment capacity compared to a
previous category.
For example, a BBB rating denotes
moderate capacity to meet financial obligations which is less strong compared
to an A rating, which means adequate capacity.
Chief executive officer Foo Su
Yin told StarBiz that the rating agency's decision to focus on sovereign
ratings for the five Asean economic heavyweights at the onset was in line with
its global aspirations.
“The Asean bond markets are on a
steep developmental curve, supported by ongoing regulatory reforms targeted at
easing capital flows and promoting greater financial integration.
“Hence, the introduction of
sovereign ratings is opportune and in line with the more integrated Asean,''
she added.
She said the five countries
displayed economic expansion that had generally outpaced global growth and
remained relatively resilient through the financial turmoil experienced by
advanced economies in 2009.
The underlying strength of the
region's largest economies stemmed from a variety of factors, which included a
track record on price stability, well-diversified external trade structure and
robust overall banking sector, Foo noted.
Meanwhile, RAM in its Public
Finance Ratings (January 2013) Publication (Leading Asean Sovereigns) said the five
countries also exhibited improving external strength through the build-up of
foreign-exchange reserves due to consistent current-account surpluses key
factors in arriving at the respective ratings.
This was especially true for the
region's more export-oriented economies such as Malaysia and Singapore, it
added, noting that the region's overall debt burden had substantially been
reduced favourably throughout the decade in comparison with other economic
regions.
Moving forward, RAM said Asean
would be taking on a greater role in facilitating global trade and finance
through the realisation of Asean Economic Community by 2015.
DALJIT DHESI
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