KUALA LUMPUR: Corporate credit is likely to improve this year supported by the steady pace of economic growth and improving outlook for some key sectors.
Infrastructure and crude palm oil have a positive outlook while the outlook for the oil and gas and property sectors will remain challenging, says the Malaysian Rating Corporation Bhd (MARC).
The infrastructure sector has benefited from a spate of mainly transport-related projects.
Most corporates are able to manage their debt in the near term, says MARC CEO Mohd Razlan Mohamed.
This follows measures which include asset monetisation, rights issues and corporate restructuring which are expected to strengthen the balance sheet metrics.
MARC maintains a stable outlook on the banking sector.
The rating agency is looking ahead to a strong bond issuance and stable private consumption this year.
Chief economist Nor Zahidi Alias said corporate bond issuance in 2017 could exceed the RM85 billion seen last year.
The GDP is expected to improve to 4.3 per cent mainly due to a stable domestic demand and resilient external demand.
He expects the ringgit to trade at between RM4.00-RM4.20 by year-end.