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Fitch: APAC Investors Expect Market Pressures and Slowing Growth

(The following statement was released by the rating agency) Link to Fitch Ratings' Report: APAC Senior Fixed-Income Investor Survey 2013 http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=719198 LONDON/SINGAPORE/HONG KONG, October 15 (Fitch) Asia-Pacific investor sentiment is coloured by expectations of pressure across all markets and that growth will slow, according to a new regional cross-sector investor survey by Fitch Ratings. APAC investors are concerned about reduced monetary easing by global central banks and its effect on credit conditions across the region. Eighty-seven percent of respondents regard a reduction in quantitative easing by major central banks as the main risk to APAC credit markets. They specifically acknowledge Emerging Asia market pressures, with 79% expecting underlying credit conditions to deteriorate for emerging-market sovereigns, with 68% expecting the same for emerging-market corporates. A similar proportion of investors expect spreads in the two segments to widen. Survey respondents anticipate slowing economic growth in many countries. The most pessimistic outlook was for India, followed closely by Indonesia. Conversely, Japan's growth is expected to accelerate. Although 46% believe China is heading for a slowdown, only a third of investors expect this to 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 favoured sector. Fifty-four percent say they will find the best yield opportunities in high-yield corporate bonds, strongly ahead of second-placed bank hybrid bonds. But views on high-yield fundamentals are weak, with two-thirds expecting deterioration. Sentiment on corporates is overall negative. Fifty-six percent say property sector fundamentals will deteriorate, with 53% pessimistic on the outlook for industrials/manufacturing. Investors expect companies to focus on capex and maintaining prudent cash cushions ahead of shareholder-biased activities. Fitch conducted its inaugural "APAC Senior Fixed-Income Investor Survey" between 20 August and 30 September. It represents the views of 72 senior investors in the APAC region, including asset-management companies, sovereign wealth funds, insurance companies, pension funds, wealth managers, banks and hedge funds. Contact: Monica Insoll Managing Director Credit Market Research +44 20 3530 1060 Fitch Ratings Limited 30 North Colonnade London E14 5GN Aninda Mitra Senior Director Fitch Wire Tel: +65 6796 7232 Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com; Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: wailun.wan@fitchratings.com. The above article originally appeared as a post on the Fitch Wire credit market commentary page. The original article can be accessed at www.fitchratings.com. All opinions expressed are those of Fitch Ratings. ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.