Fitch Thailand Seminar Addresses Credit Risks 20 Years After Asia Crisis

Stocks and Financial Services Press Releases Friday July 21, 2017 11:23
Bangkok--21 Jul--Fitch Ratings

Rising credit spreads and a sequence of defaults by Thai companies in the past year were among the risks flagged by participants at Fitch Ratings (Thailand) Limited's semi-annual investor briefing on Thailand's corporate credit outlook in Bangkok today.

In his presentation of an overview of the global and Thai fixed-income markets, guest speaker Dr. Win Udomrachtavanich, CEO of KTB Securities (Thailand) Limited, cautioned issuers and investors that "the tightening credit cycle should further lead to greater credit disparity and that issuers should adjust to expected higher funding costs in the future."

Fitch's Senior Director for Corporate Ratings, Mr. Lertchai Kochareonrattanakul, examined the warning signals in corporate credits, which may emerge from issuers' operations and financials, or from event-driven risks such as mergers & acquisitions and large debt-funded investments. While Fitch expects the Thai telecom sector to remain under pressure from slow revenue growth, margin pressure and high investment, the agency expects operating conditions in the oil and gas sector to improve gradually in 2017, thanks to a recovery in oil prices. Financial profiles of Fitch's rated corporates in Thailand are still robust, although some companies have deleveraged slower than expected in the past year due to the weak economic environment.

Another guest speaker, Dr Bandid Nijathaworn, President & CEO, Thai Institute of Directors, discussed Thailand's economic outlook and the lessons in governance and risk culture from past crises in the final keynote session, noting that "Thai banks and larger listed firms have improved their corporate governance standards, while there is room for improvement in other sectors".

Vincent Milton, Managing Director of Fitch Ratings (Thailand), who opened the seminar to more than 100 corporate treasurers and bankers, insurers, asset managers and regulatory officials, noted that the event was hosted on the 20th anniversary of the 1997 Asian financial crisis and almost 10 years since the breakout of the 2008 global financial crisis.

Fitch affirmed Thailand's Long-Term Foreign- and Local-Currency Issuer Default Ratings at 'BBB+' with Stable Outlooks on 14 June 2017.

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