Credit watchdog Moody’s Investors Service said the Asian Liquidity Stress Indicator (Asian LSI), which measures the strength of financial system in the region, decreased in November 2017 to 26.4 percent from 27.6 percent in October.
The Asian LSI is derived from the percentage of high-yield companies with Moody’s weakest speculative-grade liquidity score of SGL-4 as a proportion of high-yield corporate family ratings.
The indicator decreases when speculative-grade liquidity improves.
“The Asian LSI improved in November to 26.4 percent, largely due to the addition of new issuers, but remains weaker than the long-term average of 23.1 percent,” Brian Grieser, a Moody’s Vice President and Senior Credit Officer, said.
The number of rated high-yield companies with Moody’s weakest speculative-grade liquidity score (SGL- 4) decreased to 39 from 40, while the total number of rated high-yield companies increased to 148 from 145.
Moody’s analysis is contained in its just-released monthly report titled “Asian Liquidity Stress Indicator: Asian LSI decreases to 26.4 percent in November from 27.6 percent in October “.
“The momentum in high-yield issuance continued in November, with rated issuance totaling $1.9 billion in the month, raising year-to-date issuance to a record $33.9 billion,” added Grieser.
The liquidity stress sub-indicator for North Asian high-yield companies decreased slightly to 27.8 percent in November from 28 percent in October.
The Chinese sub-indicator remained broadly stable at 28.7 percent from 28.9 percent and the high-yield Chinese property sub-indicator increased to 19.1 percent from 17.4 percent.
The Chinese high-yield industrials sub-indicator decreased to 40 percent from 43.2 percent, driven by new rating assignments during November.
The liquidity stress sub-indicator for South and Southeast Asian high-yield companies decreased to 23.5 percent in November from 26.9 percent in October.
The Indonesian sub-indicator decreased to 23.1 percent from 24 percent.