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| ASIA PACIFIC WEEKLY |
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| May 13 - 20, 2015 |
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In this week’s Asia Pacific Weekly, we look at the strong government support provided to Chinese banks, which is a key element in their rating assessments. However, economic and policy developments, including the targeted allocation of credit to particular industries and the newly introduced deposit insurance scheme, will eventually require the government to take a more nuanced and differentiated approach in providing support to individual banks.
We also discuss the People's Bank of China's interest rate cut, which will lower the profitability of banks operating on the Mainland because overall loan rates will fall by a larger margin when compared to deposit rates.
And the Chinese pharmaceutical sector is set to benefit from the removal of direct drug price controls, a credit positive for the industry.
Finally, continued negative pressure on asset yields in Japan -- as a result of the Bank of Japan's extremely accommodative monetary policy -- may encourage greater risk taking by the country’s regional banks.
For our upcoming teleconferences and replay links, please refer to the list below. |
Best regards,
Min Ye
Managing Director – Regional Head Asia Pacific
To access the information within this email we ask that you register to Moodys.com. Registration is complimentary. |
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RESEARCH |
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Banking — Singapore — DBS, OCBC, UOB: Peer Comparison
[13 May] A number of differences among Singapore's three largest banking group by assets — DBS Bank Ltd, Oversea-Chinese Banking Corp Ltd and United Overseas Bank Limited— could lead to credit differentiation over time.
Rising Housing Market Imbalances Pose Long-Term Challenges for Australian
Banks
[13 May] Underwriting discipline and capital are key variables in maintaining the health of
bank credit profiles in Australia, in the face of rising housing market imbalances.
China's Interest Rate Reduction Is Credit Negative for Banks
[14 May] The People's Bank of China's lowering of interest rates for the third time in less than six months will lower the profitability of banks operating on the Mainland, because overall loan rates will fall by a larger margin when compared to deposit rates.
Both Korean and Taiwanese Life Insurers Are Tackling Their Negative Spreads,
but Credit Impacts Differ
[14 May] The different approaches taken by Korean and Taiwanese life insurers in tackling negative spreads has resulted in stronger credit profiles for Korean insurers in terms of overall earnings stability and key risk management metrics. As a result, our current ratings position major Korean insurers above their Taiwan counterparts.
Chinese Banks: Government Support to Remain Strong But Become More Nuanced
[18 May] A key element in its rating of Chinese banks is the level of government support that the banks receive, which is strong.
Low Returns Accepted by Shareholders Support Regional Bank Ratings
[18 May] Continued negative pressure on asset yields -- as a result of the Bank of Japan's extremely accommodative monetary policy -- may encourage greater risk taking by Japan's regional banks.
Higher Claims and Policy Lapses Challenge Australian Life Insurers'
[19 May] The higher number of policy lapses and claims for risk products largely reflects a combination of fundamental issues, including product mispricing and premium and commission structures.
Removal of Direct Government Drug Price Control will Benefit China's Pharmaceutical Industry
[19 May] The removal of Chinese government direct drug price control will be credit positive
for the country's pharmaceutical industry. The reform will create a more healthy market-driven pricing system because prices based on quality, as well as supply and demand, will motivate pharmaceutical companies to spend on innovation and product quality.
Australian ABS Indices Q1 2015", a quarterly report that tracks the performance of the
Australian ABS market.
[20 May] The performance of Australian auto asset-backed securities (ABS) deteriorated
in Q1 2015, with 30-plus day delinquencies increasing to 1.3% in March 2015 from 1.0% in December 2014.
Moody’s Credit Outlook on 14 May and 20 May
[14 May] Monsanto’s Takeover Bid for Syngenta Raises Credit Risks for Both Agribusiness Giants; Sweden’s Bank Capital Requirements Are Credit Positive; China’s Interest Rate Reduction Is Credit Negative for Banks; and more
[20 May] Noble's Deal to Buy Rosetta Provides a Credit-Positive Foothold in Key Shale Regions; SoftBank’s Aggressive Investment Strategy Is Credit Negative; Chinese Developers’ Proposed Share Placements Are Credit Positive; Australia Mulls Credit-Negative Ownership Changes for Rail Network Operator; New Zealand’s Restrictions on Mortgage Lending in AucklandWill Benefit Banks; and more |
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RATING EVENTS |
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ANNOUNCEMENTS |
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MOODY'S EVENTS |
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MOODY'S TRAINING SEMINARS |
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SINGAPORE
Corporate Credit & Cash Flow, 3-5 Jun
Credit Reasoning & Writing, 8-9 Jun
Insurance Credit Analysis, 10-12 Jun
Bank Regulation: Impact and Implications of Evolving Regimes, 13-14 Aug
Analyzing Sovereign and Country Risk, 17-18 Aug
Advanced Bank Risk Analysis, 19-21 Aug
Corporate Credit Rating Analysis, 2-4 Nov
Covenants & Documentation, 5 Nov
Fundamentals of Corporate Credit, 8-11 Dec
HONG KONG
Fundamentals of Corporate Credit, 18-21 May
Advanced Bank Risk Analysis, 20-22 May
Advanced Corporate Credit Analysis, 7-9 Sep
Credit Reasoning & Writing, 10-11 Sep
Corporate Credit Rating Analysis, 16-18 Nov
Fundamentals of Bank Credit Risk Analysis, 19-20 Nov
KUALA LUMPUR
Islamic Finance - Risk Management, 22-23 Jun
Islamic Finance - Sukuk: Theory and Practice, 24-25 Jun
SYDNEY
Insurance Credit Analysis, 26-28 Aug
Fundamentals of Corporate Credit, 31 Aug-3 Sep
Advanced Corporate Credit Analysis, 13-15 Oct
Covenants & Documentation, 16 Oct
TOKYO
Fundamentals of Bank Credit Risk Analysis, 3-4 Dec |
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CONTACT US |
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© 2015 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S").
All rights reserved. |
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