Pressure on AsiaPac companies as Covid-19 impact becomes clearer

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KUALA LUMPUR: Moody’s Investors Service said about 22 per cent of 476 rated non-financial companies in Asia Pacific (APAC) have high exposure to coronavirus disruptions, up from 20 per cent in March, as the effects of the pandemic on companies' credit quality have become more apparent.

"Airlines, automakers and auto part suppliers, casinos, discretionary retail, and hospitality companies continue to bear the economic brunt of the outbreak, given their sensitivity to consumer demand and travel restrictions," Moody's managing director and regional head of Asia Pacific corporate finance group, Laura Acres, said in an update on the report published in April on APAC corporates' exposure to coronavirus.

Of the 105 high exposure companies, nearly 90 per cent face negative operating conditions and already have negative outlooks or are under review for downgrade, with almost 30 per cent having weak liquidity. Exposure is moderate for 39 per cent of companies , up from 36 per cent in March. Most of these companies operate in the mining, property, refining and marketing, chemical, protein and agriculture sectors with just 4.0 per cent having weak liquidity.

 

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