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Chindia Alert: You’ll be Living in their World Very Soon

aims to alert you to the threats and opportunities that China and India present. China and India require serious attention; case of ‘hidden dragon and crouching tiger’.

Without this attention, governments, businesses and, indeed, individuals may find themselves at a great disadvantage sooner rather than later.

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India’s Credit Outlook Gets Boost From Moody’s – India Real Time – WSJ

India has inched farther away from junk-bond status.

Moody’s Investors Service MCO +0.71% on Thursday changed its ratings outlook on Asia’s No. 3 economy to positive from stable, citing the “increasing probability that actions by policy makers will enhance the country’s economic strength.” But it maintained its Baa3 rating, one level above junk, saying the Indian economy is still heavily exposed to external and financial shocks. Moody’s has rated India at Baa3 since 2004.

The move is a vote of investor confidence in the economic management of Prime Minister Narendra Modi and Reserve Bank of India Gov. Raghuram Rajan. Standard & Poor’s raised its India outlook to stable last fall. Fitch Ratings has had a stable outlook on India since 2013.

All three of the big agencies currently assign Indian debt their lowest investment-grade ratings. They cite similar reasons. Inflation is high. The public sector—the federal government plus the states—is highly indebted. Infrastructure is sorely deficient. The banking system is burdened with bad assets.

“While policies are beginning to address each of these factors, the extent of likely improvements is as yet unclear,” Moody’s said Thursday.

via India’s Credit Outlook Gets Boost From Moody’s – India Real Time – WSJ.

Posted in Economics, India alert | 1 Comment »

Tags: Bond credit rating, Central bank, Credit rating, Credit rating agency, Fitch Group, Fitch Ratings, India, Moody's Investors Service, Moody’s Investors Service MCO, Prime Minister Narendra Modi, Raghuram Rajan, Reserve Bank of India, Run batted in, Standard & Poors

10/04/2013

* Fitch Lowers Rating on China Local-Currency Debt

WSJ: “Fitch Ratings Inc. lowered one of its key ratings on China’s government debt, in one of the most prominent warnings to date over a credit buildup in the world’s second-largest economy.

The downgrade applies only to China’s yuan-denominated debt, which is primarily traded domestically—not the foreign-currency debt that it issues in international financial markets, so it is unlikely to have a big impact on global financial markets.

Nevertheless, it is the first outright downgrade in years of debt that is widely seen as buffered by China’s vast foreign-exchange reserves, highlighting a growing perception that massive lending by China’s banks, as well as shadowy nonbank lenders that operate under little regulation, could seriously disrupt China’s economic recovery.

Much of China’s debt came from a surge of lending in the wake of the 2008 global financial crisis, which helped Chinese growth rebound in part with the help of massive infrastructure projects but weighed down local governments and banks with loans. Analysts at Fitch have been part of a chorus of analysts and market players consistently sounding alarms about the run-up in China’s debt.

Saying that “risks over China’s financial stability have grown,” the credit-ratings firm lowered China’s long-term local-currency rating to single-A-plus from double-A-minus, with a stable outlook. It was its first downgrade of Chinese debt since at least 1997. It kept China’s foreign-currency debt rating unchanged at single-A-plus, saying it is well supported by China’s foreign-exchange reserves, worth $3.387 trillion at the end of 2012.

Bank credit extended to the private sector was equivalent to 135.7% of China’s gross domestic product at the end of 2012, the highest level of any emerging-market economy rated by Fitch, it said.”

via Fitch Lowers Rating on China Local-Currency Debt – WSJ.com.

Posted in Banking, China alert, Economics, loans | 1 Comment »

Tags: Bond credit rating, Business, China, Credit (finance), Currency, Debt, economy, Fitch Group, Foreign-exchange reserves, real-estate

CHINDIA ALERT: You'll be living in their world, very soon

Chindia Alert: You’ll be Living in their World Very Soon

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India’s Credit Outlook Gets Boost From Moody’s – India Real Time – WSJ

* Fitch Lowers Rating on China Local-Currency Debt

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