Moody’s Investors Service says that its Asian Liquidity Stress Indicator (Asian LSI) fell to 26.2% in December 2017 from 26.4% in November and 30.3% at the end of 2016, signifying an improvement in liquidity for high-yield companies in Asia in December and from the end of 2016.
The Asian LSI measures 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 increases when speculative-grade liquidity deteriorates.
“Although Moody’s Asian LSI reading remained above the long-term average of 23.1%, highlighting ongoing weakness in liquidity for many companies in Asia, the December figure also marks the strongest year-end reading since December 2014,” says Brian Grieser, a Moody’s Vice President and Senior Credit Officer.
Moody’s analysis is contained in its just-released monthly report titled “Asian Liquidity Stress Indicator: Asian LSI improves to 26.2% in December from 30.3% at year-end 2016”.
Rated high-yield issuance totaled $0.6 billion in December, raising year-to-date issuance to a record $34.5 billion.
The previous high was $23.3 billion in 2013.
The liquidity stress sub-indicator for South and Southeast Asian high-yield companies decreased to 23.1% in December 2017 from 26.2% at December 2016.
The Indonesian sub-indicator decreased to 22.2% in December 2017 from 26.2% in 20
The Chinese sub-indicator improved to 29.1% in December from 34.3% in 2016, while the high-yield Chinese property sub-indicator weakened to 23.4% compared to 20% in December 2016.
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