KUALA LUMPUR: Negative rating action driven by Covid-19 is expected to continue during the second-half of 2020, said Fitch Ratings.
The rating agency said 55 companies or 80 per cent of the total 69 Asia Pacific corporates were either remain on negative outlook or rated at the distressed rating levels of 'CCC+' and below during the first half.
"We have taken negative rating action on 69 corporates or 22 per cent of their portfolio of 310 publicly rated Asia-Pacific (APAC) corporates since the beginning of March 2020.
"We have downgraded 29 corporates, seven by more than one notch, and changed the outlook or watch on a further 40 corporates over this period," Fitch said in a report today.
The revision actions were driven – directly or indirectly – by the disruption caused by the coronavirus pandemic.
June saw a total of 14 negative rating actions, in line with May's total count of 15 but well below April's 38.
However, Fitch said the number of downgrades had fallen to just three in June (May, 8), whereas the number of outlook or watch revisions increased to 11 (May, 7).
The homebuilding, oil and gas (O&G), auto and related, and metals and mining sectors continue to dominate the firm's pandemic-related negative rating actions.
Among the 29 downgrades, the homebuilding sector leads with seven, followed by the O&G, auto and related and metals and mining sectors with three downgrades apiece.
"The O&G and utilities sectors now top the list of the additional 40 corporates on which outlooks or watches were revised in a negative direction, following our outlook revision on India in June," Fitch said.
In total, 14 outlook revisions related to sovereign-related rating actions.
For Malaysia corporates, Fitch revised corporates' issuer default rating (IDR) for two sectors namely gaming, lodging and leisure and O&G.
The rating was previously from BBB+ (March 30) to A- (April 14).
Genting Bhd, Genting Overseas Holdings Ltd and Resorts World Las Vegas LLC were revised to A- with negative outlook, while Petroliam Nasional Bhd was revised to A- with stable outlook.