One in Five Asia-Pacific Companies Highly Exposed to Virus Disruption: Moody’s

AKP Phnom Penh, April 15, 2020 —

Moody’s Investors Service said Wednesday that 20 percent of the non-financial companies it rates in the Asia-Pacific region were highly exposed to disruptions caused by the COVID-19 pandemic.

But the latest edition of the U.S. rating agency’s Inside ASEAN newsletter said exposure was moderate for 36 percent of the companies and low for 44 percent.

Moody’s said it currently rates 482 non-financial companies in the region. Asian companies are by far the biggest investors in Cambodia, notably from China, Japan, Korea and ASEAN countries.

Released in Singapore, the quarterly newsletter found that high-exposure companies were in aviation, auto manufacturing, auto parts supply, oil and gas, gaming, shipping, retail and hospitality.

More than two-thirds of these companies “have negative outlooks or are under review for downgrade, weak liquidity, or both,” the newsletter said.

At the same time, refinancing risks are high for more than a quarter of these companies “given their large debt maturities and capital-market tightening.”

Most of the moderate-exposure companies are in sectors such as property development, mining and steel, agriculture, chemicals, refining and marketing.

“Chinese property companies have moderate exposure given a slow pick up in domestic demand and construction resuming in March,” the newsletter said.

“Most of these companies have sufficient balance-sheet liquidity to meet their refinancing needs over the next 12 months, and they have good access to onshore funding.”

The newsletter said low-exposure companies were those providing essential goods and services, telecommunications and IT services along with engineering and construction companies.

Telecommunications and media are benefiting from consumer reliance on online shopping and entertainment.

“But these companies also face strains such as disruptions to their own work forces and supply chains,” the newsletter said.

Moody’s said it currently assigned credit ratings to 482 non-financial companies in the Asia-Pacific region.

By Khan Sophirom