What use is a credit rating? For Africa, it means FDI
On the face of it, sovereign credit ratings and foreign direct investment might not appear to be that dependent on each other. When you’re setting up shop overseas, does it really matter if a country is rated or not?
For sub-Saharan Africa, apparently, it does – and rating agency Fitch has done the homework to prove it. Continue reading »
[snap] Egypt downgraded by Moody’s
Moody’s Investors Service has downgraded Egypt’s government bond rating to B3 from B2 (from five to six notches below investment grade) and kept it on review for a further downgrade.
The move follows fellow rating agency Fitch which downgraded the country on January 30 to B, one notch above Moody’s B3 level. S&P has Egypt on B-, the equivalent level to Moody’s.
Full statement from Moody’s follows. Continue reading »
Croatia: Moody’s downgrades to junk
Croatia is set to become the European Union’s latest member in July, but Moody’s decision to downgrade its credit rating shows long-awaited accession cannot quickly fix the country’s woes. The sluggish pace of reform and a tight fiscal position have exacerbated the difficulties caused by the eurozone crisis. Continue reading »
Mali: spillover or lack of it
Mali’s economic isolation is helping west African rated sovereigns avoid revisions to their creditworthiness, said Standard & Poor’s in a note released on Thursday night covering Benin, Burkina Faso, Ghana, Morocco, Nigeria, Senegal, and Tunisia
FDI and portfolio flows between Mali and its neighbours are small and regional capital markets are underdeveloped. Trade and investment linkages are weak due to tariffs, poor infrastructure, low incomes and inefficient customs procedures. Continue reading »
Egypt: Fitch cuts to B amid crisis
Persistent protests and violence, a state of emergency, an increasing funding crisis: Egypt is having a tough 2013 so far.
It’s not a surprise then, that rating agency Fitch downgraded the country from B+ to B on Wednesday, and kept the country on a negative outlook, meaning further downgrades could follow. Continue reading »
Turkey rating upgrade: not now
Turkey’s hopes of an investment grade rating from Moody’s have just received, if not a bucket of cold water, then at least a tumbler or two – and shares have sagged.
Ever since Fitch Ratings gave Ankara the investment grade palm last year, hopes had risen that Moody’s would follow suit, so unleashing billions of dollars in institutional investors’ funds. (Many big portfolio investments require an investment grade rating by at least two of the big three agencies.) Continue reading »
Asian corporates: steady as they go
Asian companies will likely manage their finances pretty well in 2013, despite the pressures of the slow-growth global economy, says Moody’s the credit rating agency in a report on Tuesday.
With exporters’ margins squeezed by overcapacity and weak orders, life won’t be easy – credit downgrades will outnumber upgrades for Asian companies outside Japan, though not by as much as last year. So life will be tough, but not quite as tough as it has been. Continue reading »
Turkey kicks off 2013 with grand ambitions and fewer ratings
Plans to proceed with a gigantic infrastructure project; a decision to dispense with the services of an international ratings agency; forecasts of continued growth – there is no mistaking that Turkey has kicked off the new year in bullish fashion.
The country’s headlines are currently dominated by the aftermath of the execution-style murder in Paris of three female activists of the outlawed Kurdistan Workers party, or PKK. But the context even for this is not unremittingly grim. Continue reading »
S Africa: rand drops post-downgrade
Bad news follows bad news for South Africa, with the Rand dropping sharply on Friday in the wake of a downgrade from the ratings agency Fitch.
The currency fell over 0.7 per cent to reach 8.75 to the dollar as of 15.30 London time on Friday, a fifth day of decline in a row and hitting its lowest point since December 4. This week it has been the worst performer of the 25 EM currencies tracked by Bloomberg. Continue reading »
[snap] Fitch downgrades South Africa
Rating agency Fitch has downgraded South Africa to BBB from BBB+, staying one notch above investment grade. The country is on a stable outlook, meaning that no further downgrades are imminent.
Fitch joins S&P, which downgraded the country’s debt in October, also to BBB, and Moody’s which in September downgraded the country from A3 to Baa1. Continue reading »
Chile: on a par with China, ratings-wise
Already considered the safest bet for investors in Latin American sovereign debt, the government of Chile received a nod of approval from the ratings agency Standard and Poor’s on Wednesday, as its long-term foreign currency credit rating was notched up to AA-.
This puts the fast-growing Andean nation in some esteemed company – and ahead of all of its regional peers. Continue reading »
Chinese rating agency Dagong warns on US fiscal cliff
The US still has a few days to avert the fiscal cliff, but a prominent Chinese ratings agency is not waiting around. Dagong has already served notice of what failure might mean, putting the US sovereign rating on its negative watch list.
It is tempting to dismiss the Dagong statement as a publicity stunt, its latest in a long line of downgrades and warnings directed at the US. But Dagong’s criticism is a good reflection of views that are commonly expressed in Beijing. And given that China is the biggest foreign holder of US government bonds, these views deserve a hearing. Continue reading »
Care Ratings IPO: pre-launch party
Care Ratings, India’s second largest ratings agency by turnover, will IPO on Friday – and it seems the celebrations are starting early. Shares in two competitors have leapt ahead this week – ICRA is up more than 10 per cent and CRISIL by more than 6 per cent in a generally flat Mumbai market. Continue reading »
Hungary repels S&P’s charges
The Hungarian government of Viktor Orban puts great stress on the country’s history and culture: hence the lead story on the government website on Monday was of a squadron of hussars – light cavalry – parading in a show of pomp and colour around Buda’s Castle District on Saturday.
Good for local pride, perhaps, but buried six stories below (and only in Hungarian), was an item from late Friday that might have more bearing on the local pocket – the official riposte to Standard & Poor’s downgrading Hungary from BB+ to BB, with the outlook changing from negative to stable. Continue reading »
Turkey’s second investment grade: if not now, later
For those in the room it seemed to be a case of expecting a party and getting a lecture instead.
Despite strenuous efforts by Moody’s Investors Service to point out that its annual credit risk conference on Turkey was planned months ago, it proved impossible to dampen expectations that the event would see the ratings agency deliver investment grade to Ankara, so letting loose billions of dollars of institutional funds on the country. (Fitch gave Turkey the palm earlier this month.)
Hence the undercurrent of disgruntlement in Istanbul’s Ciragan Palace on Wednesday, as Turkey’s rating remained where it was, at Ba1, a notch below investment grade, albeit with a positive outlook. Continue reading »
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