Saturday, April 13, 2013

B&E Indicators

Asian liquidity remains solid

Liquidity remains solid for non-financial, speculative-grade companies in Asia. The region’s Liquidity Stress Index was 12.3% in June, unchanged from May, and far below the 37% high it hit during Q4 2008 amid the global economic recession. In fact, the Asian Liquidity Stress Index has remained near its current level since the start of 2011 and is at its lowest levels in three years.

A low probability of default in the region

The high level of corporate liquidity in Asia suggests a low probability of default for the region’s speculative-grade companies. In fact, there were no defaults during the first half of 2011. Even the Asia-Pacific (ex Japan) trailing-12 month speculative-grade default rate has remained at 1.7% since the beginning of 2011. This situation, coupled with manageable refinancing needs, indicates that the default rate will continue to stay low for the rest of the year as well.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
 
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