Latest news with #Moody'sRatings
The Star
4 days ago
- Business
- The Star
Moody's affirms CIMB Group's issuer ratings
Moody's Ratings said an upgrade for CIMB IB and CIMB Bank was unlikely because they are already at the same level as Malaysia's sovereign rating. PETALING JAYA: Moody's Ratings has maintained a stable outlook on CIMB Group Holdings Bhd (CIMB Group), CIMB Bank Bhd (CIMB Bank), CIMB Islamic Bank Bhd (CIMB Islamic) and CIMB Investment Bank Bhd (CIMB IB). In a report, the credit rating agency said it affirmed CIMB Group's Baa1 issuer ratings, thus reflecting its strong market position as the second-largest banking group in Malaysia by assets, and its successful de-risking initiatives in recent years. 'We expect CIMB Group's solvency and liquidity metrics to remain broadly stable over the next 12 to 18 months. The key risk to our expectation stems from the evolving US tariffs on Malaysia and other Asian countries,' Moody's Ratings said. It also said it affirmed CIMB Bank's A3 issuer ratings and its deposit ratings which is a notch higher than the bank's baa1 baseline credit assessment (BCA). 'Based on our assessment, the probability of support from the government of Malaysia (A3 stable) will be very high in times of need. CIMB Group's Baa1 issuer ratings are one notch below those of CIMB Bank, reflecting structural subordination risk for holding company debt. 'We assess CIMB Bank's BCA based on CIMB Group's overall financial performance, given that the two entities are highly integrated,' the agency said. Subsequently, Moody's Ratings had also affirmed CIMB Islamic's A3 issuer and deposit ratings, baa1 adjusted BCA and baa2 BCA, reflecting its strong asset quality, stable but moderate capital and liquidity, and modest profitability. 'The affirmation also reflects our assumption of a very high probability of support from its parent, CIMB Bank, and the Malaysian government in times of need, given CIMB Islamic's substantial contribution to CIMB Bank's domestic franchise,' it noted. As for CIMB IB, Moody's Ratings affirmed the A3 issuer, saying it was a highly integrated entity of CIMB Group. 'CIMB IB does not have a meaningful independent business franchise and relies heavily on CIMB Group's wholesale banking business. The investment bank also transfers risk exposure arising from investment banking to CIMB Bank. 'We therefore equalise CIMB IB's issuer ratings with those of CIMB Bank,' it said. Meanwhile, Moody's Ratings said an upgrade for CIMB IB and CIMB Bank was unlikely because they are already at the same level as Malaysia's sovereign rating and the formers' outlook is stable. 'However, we could upgrade CIMB Group's issuer ratings if CIMB Bank's BCA is upgraded, if CIMB Group's problem loans ratio falls below 1.5% and its market funds ratio decreases to below 15%,' the agency said. It noted it could downgrade CIMB Group, CIMB Bank and CIMB IB's issuer ratings if CIMB Bank's BCA is downgraded by more than one notch. As for CIMB Islamic's issuer and deposit ratings, Moody's Ratings said an upgrade was unlikely because they were already at the same level as Malaysia's sovereign rating and the latter's outlook is stable. 'We could downgrade CIMB Islamic's issuer and deposit ratings if CIMB Bank's BCA is downgraded by more than one notch. We could downgrade CIMB Islamic's BCA if the bank's problem financing ratio rises above 3% and its return on tangible assets falls below 0.5%.'
Japan Today
4 days ago
- Business
- Japan Today
How could Japan's election affect economic policy?
By Leika Kihara Japan's Liberal Democratic Party ruling coalition may lose its majority in the upper house in an election on Sunday, which could heighten calls for the government to boost spending and cut tax. Here is a guide on how the election outcome could affect Japan's fiscal and monetary policy: LOOMING POLITICAL UNCERTAINTY Recent media polls show the LDP coalition could lose its majority, heightening the risk of political instability when the country is struggling to strike a trade deal with the U.S., and stoking fears of an increase in debt. Japan's debt burden is the highest in the developed world at about 250% of GDP. Prime Minister Shigeru Ishiba is regarded as a fiscal hawk, but concern over possible increased spending by parties to ensure political support on Tuesday pushed up bond yields to multi-decade highs. Yields may rise further if the chance of big spending or a sales tax cut increases. WOULD JAPAN HAVE A NEW PRIME MINISTER? If the election loss is small, Ishiba could remain prime minister and seek opposition parties' cooperation to pass bills through parliament. Faced with a big defeat, Ishiba could step down and his party will hold a leadership race to choose a successor. Depending on the extent of loss, there is a slim chance a new premier could be chosen from an opposition party. WOULD JAPAN SEE BIGGER SPENDING? Regardless of the election outcome, Japan will increase spending as Ishiba has pledged to offer cash payouts to households to ease the cost of living. The estimated 3.5 trillion yen ($23.6 billion) in payouts will be funded by tax revenues. But spending may balloon if the LDP coalition suffers a big loss, as it would heighten calls from within the party and opposition forces to take bolder steps to cushion rising living costs. Some analysts expect Japan to compile an extra budget around autumn this year to fund spending of at least 10 trillion yen, which will likely require additional debt issuance. HOW LIKELY IS A CUT TO JAPAN'S SALES TAX RATE? Japan's sales tax rate is set at 10%, except for food items at 8%. Ishiba has shunned opposition calls to slash the sales tax, which funds social welfare costs for a rapidly ageing population. An election defeat could force Ishiba to cut sales tax, which would leave a huge hole in Japan's finances. Excluding proceeds from debt issuance, the sales tax is Japan's biggest source of revenue. In fiscal 2025, it collected 25 trillion yen, or 21.6% of total budget. Analysts say halving the tax rate would cut revenues by over 10 trillion yen. A sales tax cut will require passing legislation through parliament, so will not take place until April at the earliest. WHAT WOULD BE JAPAN'S WORST-CASE SCENARIO? A worst-case scenario is a credit rating downgrade on Japan's sovereign debt, which could trigger a triple selling of bonds, yen and Japanese stocks - and boost the cost of dollar funding for Japanese banks. Moody's Ratings has said an increase in tax cut pressure could be negative for Japan's rating depending on the size and duration of the cut. It rates Japan A1, the fifth-highest level. HOW WOULD THE ELECTION OUTCOME AFFECT BOJ POLICY? The ruling coalition has given a quite nod to gradual interest rate hikes, as has the biggest opposition Constitutional Democratic Party of Japan. If the clout of other smaller opposition parties increases, the BOJ could come under pressure to go slow in rate hikes. But the BOJ's long-term rate hike path is unlikely to be affected unless Ishiba is replaced by vocal advocates of bold monetary easing like Sanae Takaichi, who Ishiba narrowly defeated in a LDP leadership race last year. © (c) Copyright Thomson Reuters 2025.
Indian Express
4 days ago
- Business
- Indian Express
How could Japan's election affect economic policy?
Japan's Liberal Democratic Party ruling coalition may lose its majority in the upper house in an election on Sunday, which could heighten calls for the government to boost spending and cut tax. Here is a guide on how the election outcome could affect Japan's fiscal and monetary policy: Recent media polls show the LDP coalition could lose its majority, heightening the risk of political instability when the country is struggling to strike a trade deal with the US, and stoking fears of an increase in debt. Japan's debt burden is the highest in the developed world at about 250% of GDP. Prime Minister Shigeru Ishiba is regarded as a fiscal hawk, but concern over possible increased spending by parties to ensure political support on Tuesday pushed up bond yields to multi-decade highs. Yields may rise further if the chance of big spending or a sales tax cut increases. If the election loss is small, Ishiba could remain prime minister and seek opposition parties' cooperation to pass bills through parliament. Faced with a big defeat, Ishiba could step down and his party will hold a leadership race to choose a successor. Depending on the extent of loss, there is a slim chance a new premier could be chosen from an opposition party. Regardless of the election outcome, Japan will increase spending as Ishiba has pledged to offer cash payouts to households to ease the cost of living. The estimated 3.5 trillion yen ($23.6 billion) in payouts will be funded by tax revenues. But spending may balloon if the LDP coalition suffers a big loss, as it would heighten calls from within the party and opposition forces to take bolder steps to cushion rising living costs. Some analysts expect Japan to compile an extra budget around autumn this year to fund spending of at least 10 trillion yen, which will likely require additional debt issuance. Japan's sales tax rate is set at 10%, except for food items at 8%. Ishiba has shunned opposition calls to slash the sales tax, which funds social welfare costs for a rapidly ageing population. An election defeat could force Ishiba to cut sales tax, which would leave a huge hole in Japan's finances. Excluding proceeds from debt issuance, the sales tax is Japan's biggest source of revenue. In fiscal 2025, it collected 25 trillion yen, or 21.6% of total budget. Analysts say halving the tax rate would cut revenues by over 10 trillion yen. A sales tax cut will require passing legislation through parliament, so will not take place until April at the earliest. A worst-case scenario is a credit rating downgrade on Japan's sovereign debt, which could trigger a triple selling of bonds, yen and Japanese stocks – and boost the cost of dollar funding for Japanese banks. Moody's Ratings has said an increase in tax cut pressure could be negative for Japan's rating depending on the size and duration of the cut. It rates Japan A1, the fifth-highest level. The ruling coalition has given a quite nod to gradual interest rate hikes, as has the biggest opposition Constitutional Democratic Party of Japan. If the clout of other smaller opposition parties increases, the BOJ could come under pressure to go slow in rate hikes. But the BOJ's long-term rate hike path is unlikely to be affected unless Ishiba is replaced by vocal advocates of bold monetary easing like Sanae Takaichi, who Ishiba narrowly defeated in a LDP leadership race last year.
Business Recorder
6 days ago
- Business
- Business Recorder
Govt presents ‘compelling evidence' of Pakistan's economic recovery to Moody's
Finance Minister Muhammad Aurangzeb, in a key engagement on Tuesday, presented Moody's Ratings, a global credit rating agency, with 'compelling evidence' of Pakistan's economic recovery and reform momentum. Accompanied by Minister of State for Finance Bilal Azhar Kayani, the Governor of the State Bank of Pakistan (SBP) Jameel Ahmed, and senior officials from key ministries, Aurangzeb highlighted the country's progress in stabilizing the economy—including a sharp reduction in inflation, a cut in the policy rate, stabilization of the exchange rate, a current account surplus, and a surge in foreign exchange reserves—crossing $14 billion by the end of June. Improvements in remittance inflows and export performance were also cited as signs of resilience and renewed investor confidence, read a statement released by the Finance Division. During the in-depth session, the finance minister apprised the Moody's team of the significant strides Pakistan has made in stabilising its economy and laying the foundations for sustainable and inclusive growth. Moody's upgrades Pakistan's banking outlook to positive He underlined the successful completion of the final IMF review under the Stand-By Arrangement, including the disbursement of the second tranche and progress under the Resilience and Sustainability Facility (RSF), as key milestones that have restored confidence in Pakistan's economic management. Aurangzeb highlighted a series of structural reforms undertaken by the government to anchor long-term stability. These included fiscal measures in the recently announced budget, tariff and trade liberalisation geared towards export-led growth, and concerted efforts to rationalise expenditure. The ongoing discussions with the United States on preferential tariff access were also noted as making encouraging headway. The meeting further outlined Pakistan's re-engagement with global financial markets, including the successful arrangement of $1 billion in commercial financing from the Middle Eastern region, plans for an inaugural Panda bond, and Pakistan's intent to explore the Eurobond and other international debt markets as credit ratings improve. Govt to meet business community tomorrow, ahead of planned strike, says Aurangzeb As per the statement, the Moody's team was provided a comprehensive overview of Pakistan's reform journey, with a particular emphasis on improving the tax-to-GDP ratio through technology-driven tax administration reforms, digitisation of systems, and robust enforcement measures. Aurangzeb emphasised that the government was implementing measures to expand the tax base, plug leakages, and enhance compliance. He noted that the Rs2 trillion revenue delta achieved this year had come through autonomous efforts, and the government was firmly committed to reaching a tax-to-GDP target of 13 to 13.5% in the next few years. The finance minister also addressed queries from the Moody's team and reiterated Pakistan's commitment to staying the course on macroeconomic reforms, including in areas of privatisation, restructuring of state-owned enterprises (SOEs), and right-sizing of government. Aurangzeb expressed optimism that the improving macroeconomic indicators and reform momentum would be positively acknowledged by rating agencies, further strengthening Pakistan's case to tap international markets and deepen its external sector stability.
Yahoo
10-07-2025
- Business
- Yahoo
Moody's Ratings Upgrades ServiceNow (NOW) Long-term Issuer Rating and Senior Unsecured Notes Rating
ServiceNow, Inc. (NYSE:NOW) is one of the Moody's Ratings upgraded the company's long-term issuer rating and senior unsecured notes rating to A2 from A3, while maintaining a positive ratings outlook. The upgrade and the positive outlook come off the back of ServiceNow, Inc. (NYSE:NOW)'s strong growth fueled by product innovation and increasing profitability, which can continue to strengthen its financial profile. A software engineer at work, surrounded by a wall of computer monitors connected to a 'Data Cloud' platform. ServiceNow, Inc. (NYSE:NOW) possesses a strong track record of expanding addressable markets through extending success in the service desk into broader IT workflows and non-IT business workflows, added Raj Joshi (Moody's Ratings Senior Vice President). The firm expects ServiceNow, Inc. (NYSE:NOW)'s revenues to increase by ~20% to $13 billion in 2025. Furthermore, despite the large scale, the firm sees similar growth rates over the upcoming 2 – 3 years. It also expects its FCF to surpass $4 billion and $5 billion in 2025 and 2026, respectively. Parnassus Investments, an investment management company, released its Q1 2025 investor letter. Here is what the fund said: 'We initiated two positions in the Information Technology sector during the quarter: Advanced Micro Devices, a manufacturer of semiconductor devices and electronic components, and ServiceNow, Inc. (NYSE:NOW), which provides software for automating enterprise workflows, after significant share price drawdowns in both cases. As a result of these additions, our underweight in the sector lessened, and our positioning is closer to market weight. While we acknowledge the potential of NOW as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 13 Cheap AI Stocks to Buy According to Analysts and 11 Unstoppable Growth Stocks to Invest in Now Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
