Moody’s: Liquidity stress up

Moody’s Asian Liquidity Stress Indicator (LSI) weakened slightly to 29.0% in May 2018 when compared with the 28.8% for April 2018.

The Asian LSI measures the percentage of high-yield companies with Moody’s weakest speculativegrade liquidity score of SGL-4 as a proportion of high-yield corporate family ratings. The indicator increases when speculative-grade liquidity deteriorates.

“The Asian LSI, however, remained above the 12-month average of 27.1% for the third consecutive month, indicating a weakening trend in liquidity for companies with speculative-grade ratings,” said Brian Grieser, a Moody’s senior credit officer.

The Chinese high-yield subindicator increased to 33.7% in May, from 33.3% in April, and the Chinese property sub-indicator increased to 26.0% from 25.0%. However, the Chinese industrials sub-indicator improved to 42.2% from 43.2% in April.

The liquidity stress sub-indicator for South and Southeast Asian highyield companies was unchanged at 23.6% in May. The Indonesian subindicator decreased to 16.7% from 20.0% in April.

High-yield issuance tempered in May, with refinancing activity driving total issuance to US$1.4 billion (44.9 billion baht) during the same month, a significant decline from April’s $4.3 billion.

Issuance between January and May 2018 totalled $13.5 billion.