Asia's (ex-Japan) corporate sector will be largely stable over 2022 on the back of a demand rebound from advanced economies, said Moody’s recently.
The global economic recovery will strengthen amid diminishing uncertainties over the pandemic and supply chain imbalances, the firm pointed out.
"However, risks to growth could come from policy transitions away from growth and tightening funding access. Central banks in major emerging markets such as China, India and Indonesia will shift to a neutral policy stance from an accommodative one as growth prospects durably improve," said Gloria Tsuen, a Moody's Vice President and Senior Credit Officer.
For China, increased regulatory curbs indicate a shift in policy focus toward systemic risk management rather than economic growth, said the credit rating agency.
The country's tightening funding environment increases refinancing risk, especially for companies with weak credit quality or liquidity, and drives the negative outlook on the property sector, the firm added.
The outlook for Asia Pacific's telecom sector is stable amid increasing revenue, positive cash flows and manageable refinancing risk, according to Moody’s.
Likewise, the region's power sector faces stable industry prospects given supportive regulatory frameworks and rising power consumption, although the path to net zero will be increasingly challenging, the credit rating agency noted.
Moody's outlook for Asia's (ex-Japan) rated nonfinancial companies reflects its expectations for fundamental business conditions in this sector over the next 12-18 months, the firm said, adding that it does not reflect its outlook for individual issuers.