Fitch: APAC Investors Expect Market Pressures and Slowing Growth

Reuters

(The following statement was released by the rating agency)Link to Fitch Ratings' Report: APAC Senior Fixed-Income InvestorSurvey 2013http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=719198LONDON/SINGAPORE/HONG KONG, October 15 (Fitch) Asia-Pacificinvestor sentiment is coloured by expectations of pressure across all markets andthat growth will slow, according to a new regional cross-sector investor surveyby Fitch Ratings.APAC investors are concerned about reduced monetary easing byglobal central banks and its effect on credit conditions across the region.Eighty-seven percent of respondents regard a reduction in quantitative easingby major central banks as the main risk to APAC credit markets. Theyspecifically acknowledge Emerging Asia market pressures, with 79% expectingunderlying credit conditions to deteriorate for emerging-market sovereigns, with68% expecting the same for emerging-market corporates. A similar proportion ofinvestors expect spreads in the two segments to widen.Survey respondents anticipate slowing economic growth in manycountries. The most pessimistic outlook was for India, followed closely byIndonesia. Conversely, Japan's growth is expected to accelerate. Although46% believe China is heading for a slowdown, only a third of investors expect thisto be a hard landing and cause difficulties for the regional credit markets.Investor sentiment is divided on the merits of high yield.Twenty percent voted it their top investment choice, just behind the favourite,corporates - but an even greater proportion say high yield is their least favouredsector. Fifty-four percent say they will find the best yieldopportunities in high-yield corporate bonds, strongly ahead of second-placed bank hybridbonds. But views on high-yield fundamentals are weak, with two-thirds expectingdeterioration.Sentiment on corporates is overall negative. Fifty-six percentsay property sector fundamentals will deteriorate, with 53% pessimistic onthe outlook for industrials/manufacturing. Investors expect companies to focuson capex and maintaining prudent cash cushions ahead of shareholder-biasedactivities.Fitch conducted its inaugural "APAC Senior Fixed-Income InvestorSurvey" between 20 August and 30 September. It represents the views of 72 seniorinvestors in the APAC region, including asset-management companies, sovereignwealth funds, insurance companies, pension funds, wealth managers, banks andhedge funds.Contact: Monica InsollManaging DirectorCredit Market Research+44 20 3530 1060Fitch Ratings Limited30 North ColonnadeLondon E14 5GNAninda Mitra Senior DirectorFitch WireTel: +65 6796 7232Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234,Email: leslie.tan@fitchratings.com; Wai-Lun Wan, Hong Kong, Tel: +8522263 9935, Email: wailun.wan@fitchratings.com.The above article originally appeared as a post on the FitchWire credit market commentary page. The original article can be accessed atwww.fitchratings.com. All opinions expressed are those of Fitch Ratings.ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS ANDDISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THISLINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION,RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLEON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS,CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'SCODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATEFIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLEFROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHERPERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES.DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN ANEU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUERON THE FITCH WEBSITE.

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