Skip to content
International Adviser
  • Contact
  • Login
  • Subscribe
  • Regions
    • United Kingdom
    • Middle East
    • Europe
    • Asia
    • Africa
    • North America
    • Latin America
  • Industry
    • Tax & Regulation
    • Products
    • Life
    • Health & Protection
    • People Moves
    • Companies
    • Offshore Bonds
    • Retirement
    • Technology
    • Platforms
  • Investment
    • Equities
    • Fixed Income
    • Alternatives
    • Multi Asset
    • Property
    • Macro Views
    • Structured Products
    • Emerging Markets
    • Commodities
  • IA 100
  • Best Practice
    • Best Practice News
    • Best Practice Awards
  • Media
    • Video
    • Podcast
  • My IA
    • Events
    • IA Tax Panel
    • IA Intermediary Panel
    • About IA

ANNOUNCEMENT: Read more financial articles on our partner site, click here to read more.

SIGN IN INTERNATIONAL ADVISER

Access full content on the International Adviser site, access your saved articles, control email preferences and amend your account details

[login-with-ajax]
Not Registered?

Five views on Moody’s downgrade of China

By , 25 May 17

Asset managers comment on Moody’s decision to lower China’s sovereign credit rating by one notch to A1 from Aa3, with stable outlook.

Axa Investment Managers
Gallery

12345

Axa Investment Managers

Jim Veneau, Axa IM‘s head of Asia fixed income, Aidan Yao, senior emerging Asia economist, and Honyu Fung, senior portfolio manager at the firm, expect that the downgrade will have a limited impact on China’s fixed income market as well as individual bond issuers’ ratings.

“Given [various] tentative improvements and a clear intention by the government to control financial risks, we find the timing of Moody’s decision somewhat surprising,” they said in a commentary.

“The combination of current actions on financial deleveraging and long-term hopes on structural reforms is supportive to our cautiously constructive view on China, and is perhaps the key reason why Moody’s has placed China on outlook stable after today’s rating cut.”

The effect on the onshore bond market is likely to be negligible as onshore participants indicate they pay limited attention to Moody’s or other rating agencies, they noted.

For hard currency Chinese credits, “Chinese investors are large holders and represent the likely demand for Chinese credit, so expect them to remain unfazed by the downgrade and to be the probable bidders”, they continued.

“There may be some rating impact on state-owned enterprises, but it should be case by case and not necessarily a matching one-notch downgrade.” 

However, there might be some selling in some global Chinese credits such as the internet and oil companies. 

Tags: China | Moody's

Share this article
Follow by Email
Facebook
fb-share-icon
X (Twitter)
Post on X
LinkedIn
Share

Related Stories

  • Asia

    Asia

    Time for investors overweight the US to rotate into Asia, says SJP head

    Asia

    Utmost Wealth Solutions appoints head of Asia

  • Asia

    Lighthouse Canton continues expansion drive with strategic partnership

    Asia

    HSBC appoints head for wealth in Singapore


NEWSLETTER

Sign Up for International
Adviser Daily Newsletter

subscribe

  • View site map
  • Privacy Policy
  • Terms and Conditions
  • Contact

Published by Money Map Media – part of G&M Media Ltd Copyright (c) 2024.

International Adviser covers the global intermediary market that uses cross-border insurance, investments, banking and pension products on behalf of their high-net-worth clients. No news, articles or content may be reproduced in part or in full without express permission of International Adviser.