“The 2012 wall of maturing debt poses a major challenge for the GCC corporates as $28 billion worth of debt ' nearly one fifth of an estimated $145 billion of total debt outstanding - will mature that year,” Martin Kohlhase, assistant vice president-analyst at Moody’s Middle East in Dubai, said.
The majority of this maturing debt is held by entities based in Dubai and Abu Dhabi, especially investment holding companies and real estate developers and related companies, he said in a report published on Monday. “Moody’s notes the apparent lack of a catalyst that could stabilise the credit environment in the region,” said Kohlhase in a report.
The credit rating agency said a stabilisation would require a number of soft and hard factors to come into play. “The main soft factors involve restoring confidence and improving transparency through greater public disclosure. The hard factors that could provide the impetus for a broader stabilisation include: an improved regulatory framework, especially the insolvency regime; macroeconomic stabilisation; and greater capital market access and a resumption of bank lending.”
Moody’s said that GCC issuers’ prospects in 2012 will be determined by their ability to roll over short-term maturities and
address upcoming bullet repayments, which are as high as 95 percent of all debt outstanding in one particular case, while stabilising their operating performance.
“Moody’s views real estate developers and those issuers with a high exposure to the real estate market as vulnerable due to overcapacities that are likely to persist for the foreseeable future,” Kohlhase said.
In a separate report, also released on Monday, Moody’s said banks in the Arab world have been comparatively well insulated from the effects of the recent global financial disruption and ensuing recession.
However, the region’s banks continue to face challenges that vary dramatically from one sub-region to another, as reflected in the banks” different risk profiles, said Moody’s Investors Service in a new report titled “Arab Banks: Shielded Domestic Market Underpin Resilience to Crisis.”
“The main reasons for the resilience of Arab banks to the crisis include the capacity among both conventional and Islamic banks to adapt to macro-economic adversity; their minimal exposures to subprime-related asset classes; government support and sometimes intervention; as well as local and regional idiosyncrasies,” said Anouar Hassoune, VP-Senior Credit Officer at Moody”s Paris office and author of this report.
According to the report, one key factor is that banks in the Arab world had minimal exposure to subprime-related asset classes or structured debt derivatives, and fewer still to troubled global investment banks. Moody’s believes that this is because banks in this region had limited incentives to seek inflated returns abroad when domestic markets offered a far better risk-return trade-off.
“The fostering of a largely insulated domestic market in the Arab world was also aided by the supportive " and sometimes interventionist " attitude of regulators and states, but it was also the result of much improved macroeconomic structures within countries, which our sovereign ratings have captured over the past decade,” said the report.
The financial landscape of the Arab world had begun changing before the crisis, but the current environment is forcing faster adjustments, said the report. Moody’s believes that banks will not see the benefits of these adjustments in the near term, but rather in the longer run.
The current issues in this sector vary dramatically from one sub-region to another. “This reflects the strong diversity of banking in the Arab world, despite increasing business, financial and economic intra-regional links,” said Hassoune. For example, while liquidity and asset concentration remain the issues among the GCC banks, North African banks face the challenge of keeping up with the pace of banking reforms.
While Moody’s maintains a stable outlook on most banking systems in the Arab world, it maintains a negative outlook on three countries "Bahrain, Kuwait and the UAE. “These three banking systems have been the most affected by the liquidity drought, the sharp fall in asset prices and the dramatic negative impact suffered by specialised institutions as a result of a concentrated, wholesale funding strategy and massive asset impairments.”For the latest updates on the stock market, visit Stock Market Today
portugal debt maturity schedule 2012, kuwait UAE debt maturity schedule 2012, Bahrain debt arab saudi maturity schedule 2012, bank debt maturity schedule 2012, GCC banks debt maturity schedule 2012, North African debt maturity schedule 2012, For the latest updates PRESS CTR + D or visit Stock Market news Today
No comments:
Post a Comment