Latest news with #creditratings
South China Morning Post
3 days ago
- Business
- South China Morning Post
Hong Kong credit ratings reflect strength, support for city on financial front
For an economy that is supposed to be in the doldrums according to some pessimists, Hong Kong's performance has not been too shabby lately. The economy experienced robust growth in the first quarter of this year, with a 3.1 per cent rise in gross domestic product from the same period last year and an 8.7 per cent jump in exports. Early signs are that the city is successfully diversifying its exports to new markets across Southeast Asia and in the Middle East, to compensate for losses from trade with the United States because of the tariff war. Advertisement It should, therefore, come as no surprise that all three major credit ratings firms have reaffirmed the fiscal stability and resilience of the city's outlook. Moody's and S&P Global have maintained their 'Aa3' and 'AA+' credit ratings for Hong Kong, respectively their fourth highest and second highest. They came just days after Fitch Ratings said it was maintaining Hong Kong's 'AA-', its fourth highest. Indeed, Moody's upgraded the city's outlook from 'negative' to 'stable'. It is reassuring as the latest ratings come at a time of deep uncertainties about the world's economic and trade outlooks because of the on-again, off-again tariffs imposed by US President Donald Trump against friend and foe alike. All three ratings reflect the city's strong financial position, with its large fiscal buffers, low debt as well as solid funding and ample liquidity within the banking sector. It means Hong Kong has very low credit risk and a strong capacity to repay its debts. S&P has also noted the local government's flexible and effective policies while the US dollar-peg continues to support monetary and financial stability. While the city's deficit, revised down to HK$80.3 billion from HK$87.2 billion, worries some critics, most economists consider it quite manageable. Depending on several likely scenarios, the government's consolidated account – combining its operating and capital accounts – is expected to return either to a surplus or a deficit down to HK$59 billion in 2028-29. Throughout this period, the fiscal reserves are expected to remain at about HK$500 billion. Advertisement One reason for the lingering deficit is high capital works expenditure from megaprojects such as the Northern Metropolis in the northern New Territories. The local capital markets are being reanimated, especially with a thriving initial public offering (IPO) scene, which just saw this year's biggest debut with Chinese battery giant Contemporary Amperex Technology (CATL). That is expected to propel Hong Kong back to the top three ranking in IPO listings.
South China Morning Post
5 days ago
- Business
- South China Morning Post
Moody's and S&P Global keep ‘Aa3' and ‘AA+' credit ratings for Hong Kong
Moody's and S&P Global have maintained their 'Aa3' and 'AA+' credit ratings for Hong Kong, with the former upgrading the outlook from 'negative' to 'stable'. Their grades on Tuesday came after Fitch maintained its 'AA-' credit rating and 'stable' outlook for Hong Kong last week. Both Moody's and S&P cited the city's substantial fiscal buffers and foreign exchange reserves, strong external balance sheet and high per capita income levels. Moody also pointed to the resilience of the city's economy and financial system at a time of trade tensions, while S&P noted Hong Kong's flexible and effective government policies and the linked exchange rate, which promoted monetary and financial stability. In response to the latest ratings, a government spokesman said: 'The recent affirmations of Hong Kong's credit ratings by Fitch, S&P and Moody's, all with 'stable' outlooks, demonstrate Hong Kong's resilience in maintaining stability amid increasing global economic and financial uncertainties. 'Recent data has further underscored the robustness of Hong Kong's financial system. Bank deposits have continued to grow, capital markets remain active and the IPO market is thriving, all of which signal global investors' confidence in Hong Kong.'
Bloomberg
18-05-2025
- Business
- Bloomberg
US States Likely to Defy US Downgrade to Keep Top Credit Ratings
US states from Florida to North Carolina and Texas would likely hold onto top-notch credit scores from Moody's Ratings, mostly because they're in better fiscal shape than the federal government itself. More than a dozen states have pristine triple-A ratings from Moody's, according to Bloomberg-compiled data, ranking them higher than the US government, which was stripped of its last top credit rating on Friday. That's in part thanks to requirements for all but one, including the District of Columbia, to balance their operating budget in some form, according to a 2021 report by the National Association of State Budget Officers.
Wall Street Journal
18-05-2025
- Business
- Wall Street Journal
Private-Credit Ratings Under Scrutiny: Conflicting Interests Fuel Investor Concerns
Ratings that grade private-credit products and are used by investors to categorize debt issued by lending firms are increasingly being called into question by industry decision makers. Credit firms that bundle packages of loans to back securities like collateralized loan obligations, or CLOs, are often able to choose the ratings provider for such issues. Critics say this can lead to conflicts of interest, as the issuer pays fees to the ratings provider while the resulting grades can significantly affect the marketability of the rated securities.
CNA
16-05-2025
- Business
- CNA
Fitch puts Taiwan life insurers on downgrade watch after currency surge
TOKYO :Credit ratings agency Fitch on Thursday placed five Taiwanese life insurers under review for potential downgrades after a sharp surge in the Taiwanese dollar this month put stress on their balance sheets. Fitch put Cathay Life Insurance, Fubon Life Insurance, KGI Life Insurance, Nan Shan Life Insurance and Taiwan Life Insurance on "Rating Watch Negative" due to the "substantial currency mismatch" produced by their "sizeable" U.S. dollar holdings, the ratings agency said in a press release. "While insurers have hedged a majority of their balance sheet mismatches, we believe this strategy will come under pressure due to the surge in hedging costs, and unhedged positions continue to expose them to sharp currency swings," Fitch said. "The potential for further Taiwan dollar appreciation remains." Taiwan's dollar experienced an unprecedented 8 per cent two-day surge at the start of this month in what analysts postulate was a scramble to repatriate U.S.-based investments, with confidence in the U.S. dollar tarnished by President Donald Trump's trade war, and as speculation built that U.S.-Taiwan tariff negotiations might include an agreement to weaken the greenback. Fitch estimates the insurers have sufficient capital buffers to withstand a 10 per cent rise in the Taiwan dollar against the U.S. dollar from the start of 2025. Currently, the local currency is up about 8.8 per cent this year. The ratings agency said it expects to resolve the reviews over the next three to six months.
