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outlooks 2020

Webinar: 2020 Outlook for Asia-Pacific Sovereigns

December 11, 2019
4:00pm HKT

Join Fitch’s senior analysts from APAC Sovereign team to discuss the 2020 outlook - Financial buffers and policy easing help sustain growth in APAC.

Register Now

Related Reports

View all outlooks: Credit Outlooks 2020

Most APAC Bank Sector Outlooks Stable, but Risk Appetite Rising

The sector outlooks on most Asia-Pacific (APAC) banking systems are stable, says Fitch Ratings in two reports published today. However, most banks are increasing their risk appetite in response to pressure on profitability, while the outlooks on four of the region's developed-market banking systems and three of the emerging-market banking systems are negative.


Related Report:
2020 Outlook: Asia-Pacific Developed Market Banks
2020 Outlook: Asia-Pacific Emerging Market Banks

View all Outlooks:
Credit Outlooks 2020

outlooks 2020

Emerging Asia's Finance and Leasing Cos Face a Challenging 2020

The operating environment for finance and leasing companies in China, India and Indonesia is likely to remain challenging in 2020, with tight funding conditions, a weak economic background and deteriorating asset quality testing the resilience of issuers' financial profiles and business models, says Fitch Ratings. We have assigned a negative outlook to the sector.


Related Report: 2020 Outlook: APAC Emerging Market Finance and Leasing Companies

View all Outlooks: Credit Outlooks 2020

Weaker Environment Exacerbates Challenges for APAC Banks

Global macroeconomic challenges are likely to increase pressure on the short-term earnings prospects of investment-grade banks in the Asia-Pacific, Fitch Ratings says in a new report. The report addresses the main questions asked by US and Canada-based investors during a recent tour by Fitch analysts to discuss mainly investment-grade rated banking systems, with particular focus on Australia, New Zealand, mainland China and Hong Kong, Japan, Korea and Singapore.


Related Report: What Investors Want to Know: Asia-Pacific Investment-Grade Banks

outlooks 2020

APAC Utilities - Marginal Decline in Sector Leverage and Capex

Fitch Ratings expects a marginal decline in sector average leverage for Asia-Pacific (APAC) utilities in 2020, as growth in funds from operations outpaces the rise in debt. We expect sector median capex to come down from the previous peaks, but to remain high.


Related Report: 2020 Outlook: Asia-Pacific Utilities

View all Outlooks: Credit Outlooks 2020

outlooks 2020

Japanese Insurers Investment Risks Likely to Rise in 2020

The biggest risks for Japanese insurers will continue to stem from financial markets in 2020, says Fitch Ratings. Fitch expects insurers to boost their investments in foreign credit-spread products in search of yield amid the 'super-low' interest rates in Japan.


Related Report: 2020 Outlook: Japan Life and Non-Life Insurance

View all Outlooks: Credit Outlooks 2020

outlooks 2020

Chinese Insurers Adjusting for Stable Earnings and Capital

Fitch Ratings maintains a stable outlook on the Chinese insurance sector, reflecting an ongoing shift in the business mix to seek a stable stream of premium and enhance margins. Capitalisation remains adequate to support asset risks in view of more efficient asset-liability management (ALM) amid challenging financial markets.


Related Report: 2020 Outlook: China Insurance

View all Outlooks: Credit Outlooks 2020

outlooks 2020

APAC Oil and Gas - Investment Momentum to Continue

Fitch Ratings' stable outlook on rated APAC oil and gas (O&G) issuers reflect the strong sovereign linkages of most Fitch-rated O&G entities or such entities being key subsidiaries of sovereign-owned national oil companies (NOCs). We envisage minimal rating changes as most sovereign ratings are on stable outlook, except Thailand and Vietnam which are on Positive Outlook.


Related Report: 2020 Outlook: Asia-Pacific Oil and Gas

View all Outlooks: Credit Outlooks 2020

outlooks 2020

APAC Autos Face Tough Environment; Supported by Financial Profiles

Fitch Ratings expects weaker global demand and rising investment to continue to put pressure on Asia-Pacific automotive manufacturers' profitability and cash flow generation in 2020.

Related Report: APAC Autos Face Tough Environment; Supported by Financial Profiles

View all outlooks: Credit Outlooks 2020

outlooks 2020

Conducive Policies Underpin Stable Outlook for India and Indonesia Property

Fitch Ratings has a stable outlook on the south and south-east Asian property market. This is driven largely by our outlook on Indonesian property, which forms the bulk of Fitch's rated-issuers in the region.

Related Report: 2020 Outlook: South and South-East Asia Property

View all outlooks: Credit Outlooks 2020

Outlooks 2020

Steady Expansion for Chinese Engineering and Construction on High Leverage in 2020

Fitch Ratings expects the construction activity in 2020 of Chinese engineering and construction (E&C) companies to expand at levels similar to 2019, with a probable property-sector slowdown due to tighter financing for developers being offset by a rise in infrastructure investment as the government quickens project approvals and relaxes financing rules. However, leverage is likely to stay high on working-capital outflows and negative free cash flow.

Related Report: 2020 Outlook: China Engineering and Construction

View all outlooks: Credit Outlooks 2020

Outlooks 2020

Korean Insurers' Profitability to be Under Pressure in 2020

Fitch Ratings maintains a stable outlook for the Korean insurance sector, with strengthening of capital adequacy following the tightening in the regulatory capital regime to be offset by downward pressure on insurers' financial performance.

Related Report2020 Outlook: Korea Insurance

View all outlooks: Credit Outlooks 2020

Outlooks 2020

Stable 2020 Outlook for China's Structured Finance

Fitch Ratings maintains a stable asset performance outlook and Stable rating Outlook for Chinese auto-loan ABS and RMBS for 2020. We expect asset performance to be supported by an expanding, albeit slowing, economy, as highlighted by still-low unemployment and rising disposable incomes.

Related Report2020 Outlook: China Structured Finance

View all outlooks: Credit Outlooks 2020

India Auto-Loan ABS Pools Continue to Outperform Originators' Mother Pools

Indian auto-loan ABS transactions will continue to outperform the portfolios of their respective originators. The transactions we rate typically have peak 90+days past due (dpd) rates that are 30% to 60% lower than the vintage pools of the originators for the different loan types. The key reason for the better performance of securitised transactions is the exclusion of a riskier portion of the originators' portfolios.

CNBC & Bloomberg Radio

Asia Gaming Trip Takeaways (Macro Headwinds in Macau; Sound Rationale for Singapore Expansions)

The  current  macro environment in China underpins our low single-digit growth-rate forecast for Macau gaming revenues in 2020. VIP segment is expected to remain flat, with some downside risk should US/China trade relations escalate further, while the mass segment should grow in-line with China GDP.


Related press interviews:
Expect single-digit growth for Macau gaming in 2020
Mass Market Gaming in Macau Is Holding Up


How Falling Coal Prices are Likely to Affect Indonesian Miners

Available On-Demand


Fitch Ratings expects Geo Energy Resources Limited (B/Negative) and PT ABM Investama Tbk (B+/Negative) to be the most sensitive to falling coal prices among Fitch-rated Indonesian coal miners. The two companies are likely to face the most cash flow pressure and liquidity will suffer from sustained coal-price falls.


Listen to Webinar: Indonesian Coal Miners

Related Report: Spotlight: Indonesian Coal Miners

Marketing Costs Offset Korean Telcos' Wireless Growth

South Korea's accelerating 5G conversion has led to a growth in wireless average revenue per user and revenue in 3Q19, but operating profit has been weighed down by higher handset subsidies amid intensifying competition. However, we expect operating profit to gradually improve over the medium term as the high marketing costs in the early stage of 5G adoption will be increasingly offset by benefits of expansion in the 5G subscriber base.

Fire Premium Hike Positive for Japanese Non-Life; Limited Earnings Impact

Fitch Ratings views premium increases for fire business recently approved by Japan's Financial Services Agency as positive for the earnings of non-life insurers. However, this will be offset in part by rising reinsurance costs due to a likely rise in reinsurance premiums and coverage. A short-term boost may also be somewhat limited as most retail fire policies have multi-year terms with a maximum of 10 years.

Sri Lanka Election Result Increases Policy Uncertainty

Sri Lanka's presidential election significantly increases policy uncertainty and could prompt loosening that exacerbates fiscal weaknesses and a rollback of reforms. However, whether these risks materialise remains to be seen as a clear policy direction may only start to emerge after parliamentary elections.

IBOR Transition a Challenge for Small Portion of Sukuk Market

The transition to new risk-free rates (RFRs) creates challenges for the small portion of the sukuk market that reference legacy IBORs, Fitch Ratings says. These sukuk will face the same uncertainties as conventional bonds, with the added complexity of how transition to RFRs can be accommodated in underlying sukuk structures.

Korean Banks to Steer Steady Course Despite Macro Challenges

South Korean banks will report a steady performance for the remainder of 2019, despite slowing economic growth. Banks are showing modest decline in profitability (yoy) due to narrower interest margins and slightly higher credit costs, but in line with Fitch's previous forecasts.

rating action

Fitch Affirms China at 'A+'; Outlook Stable

China's ratings are supported by the country's robust external finances, strong macroeconomic performance, and size as the world's second-largest economy. The ratings are primarily constrained by large structural vulnerabilities in the financial sector, relatively low per capita income, and weaker governance metrics than those of 'A' rated peers.

outlooks 2020

Australian, New Zealand Structured Finance Ratings Stable as House Prices Stabilise

Fitch Ratings' outlook for asset performance of and ratings on Australian and New Zealand structured finance is stable for 2020. The agency's view, which remains unchanged from 2019, is due to the sector being supported by continued GDP growth of 2.3% for Australia and 2.4% for New Zealand.


Related Report: 2020 Outlook: Australia, New Zealand Structured Finance

View all Outlooks: Credit Outlooks 2020

Australian Mortgage Prepayments Rebound from 19-Year Lows; Seasonal Fall in Arrears

The conditional prepayment rate on Australian mortgages rebounded from a 19-year low in 3Q19 to be up by 330bp to 19.0%, says Fitch Ratings in a new report. Prepayment rates have been low since 2017, with the conditional prepayment rate below 20% for the entire period; the longest period that the rate has remained below this level.

Sri Lankan Banks Facing Pressure on Credit Profiles

Pressure on banks' financial profiles due to challenging operating conditions - as reflected in our 2019 negative banking-sector outlook for Sri Lanka - became more apparent in the banks' 1H19 results, Fitch Ratings says in a new report.

China's Merger Plan May Support Clean-Up of Small Banks

China's reported plans for widespread mergers could complement the authorities' efforts to address significant weaknesses at small banks, potentially over time leading to stronger and more transparent institutions.

Chinese Credit Card ABS Falters as Auto ABS, RMBS Remain Strong

China's credit card ABS performance has deteriorated significantly over the past 21 months amid aggressive expansion by some banks into consumer finance, rising household debt and the spillover from the crackdown on shadow banking.

outlooks 2020

APAC Technology - Trade Rows Biggest Risk to Sector Stability

Prolonged US-China trade tension and slower growth in China are the biggest risks to an otherwise stable sector outlook for Asia-Pacific (APAC) technology companies.

Related report: 2020 Outlook: Technology/Asia-Pacific

View all Outlooks: Credit Outlooks 2020

China Corporate Bond Market Blue Book: Defaults More Common; Documentation and Legal Framework Still Evolving

The China Corporate bond market has been evolving rapidly in recent years. The latest issue of China Corporate Bond Market Blue Book is an update to our last edition published in May 2015 which presents our observations on key market developments, including corporate bond defaults, post-default workouts, new bond categories, and emerging credit derivatives products.


Listen to Webinar:
China’s Corporate Bond Market: Rising Defaults Amid Further Opening-up

outlooks 2020

APAC Telcos - Competition, Capex Limit Deleveraging

Fitch Ratings expects Asia-Pacific (APAC) telecoms operators to undertake prudent capital preservation and a sharper focus on profitability over the next 12 months, to manage their credit strength ahead of a progressive 5G investment cycle. Regulatory issues and high spectrum fees in India are the biggest risks to sector recovery.


Related Report: Fitch Ratings 2020 Outlook: Asia-Pacific Telecoms

View all Outlooks: Credit Outlooks 2020

Indonesian Coal Miners to Manage CCoW Conversion

Fitch Ratings expects Indonesian coal miners to manage the phasing out of Coal Contracts of Work (CCoW), which are likely to be extended or replaced with a special mining licence (IUPK), with little disruption to their operations, given the economic importance of the domestic coal industry. We also do not expect changes in royalties, tax rates and limitations on concession areas, on which there is little clarity, to affect rated companies' credit profiles.

Commodities Credit Journal

Our Credit Journals are a curated compilation of Fitch Ratings’ in-depth research and commentary. 

Download the Commodities Credit Journal.

APAC Frontier Sovereigns Diverge; Vietnam Achieves Stable Growth

Diverging APAC frontier market sovereign ratings in recent years reflect Vietnam's lengthening record of macroeconomic stability while Mongolia, Sri Lanka and Pakistan have faced external vulnerabilities. Our Positive Outlook on Vietnam suggests this divergence could continue, notwithstanding the varying degrees of stabilisation seen in the other three sovereigns' credit profiles.

China Corporates May Post Slowest Earnings Growth in Four Years

China's A-share listed corporates are likely to report the slowest growth for revenue and profit from operations since the last downturn in 2015-2016 this year amid an economic slowdown and the ongoing US-China trade dispute.


Related Press Release:
China Corporates May Post Slowest Earnings Growth in Four Years

Typhoon Hagibis an Earnings Event for Japan's Insurers

Typhoon Hagibis is likely to be an earnings event for Japan's three main non-life insurance groups, MS&AD, Sompo and Tokio Marine, with no material effects on capital and no rating implications.

rating action

Fitch Affirms Australia at 'AAA'; Outlook Stable

Australia's 'AAA' rating is underpinned by an effective and flexible policy framework that has, in combination with strong net migration, supported 28 consecutive years of positive GDP growth in the face of substantial external, financial, and commodity-price shocks.

rating action

Fitch Revises MUFG's Outlook to Negative; Affirms Ratings

Fitch Ratings has affirmed the Long-Term Issuer Default Ratings (IDRs) on Mitsubishi UFJ Financial Group, Inc. (MUFG) and its subsidiaries (together referred to as the group). The Outlook on the group's Long-Term IDRs has been revised to Negative from Stable.


Test of Indian Renewables RGs' Liquidity

October 29, 2019
16:30 HKT

Join us for a webinar discussion on our findings in a recently published special report "Test of Indian Renewables RGs' Liquidity", in which we examine the liquidity strength of various rated RGs under different stress scenarios.


Register Now

Indian Banks to Face Capital Shortfalls in Event of NBFC Stress

Indian banks would face a capital shortfall of about USD50 billion in the event of a systemic crisis in the non-bank financial company (NBFC) sector, according to a stress test conducted by Fitch Ratings. The credit profiles of the state banks would come under significant pressure, and the weakest - including those with Viability Ratings in the 'b' range - would face heightened solvency risks without capital injections from the government.

Australian Fixed-Income Investor Survey 4Q19

Australian fixed-income investors consider political and geopolitical risk to be the greatest threat to domestic credit markets over the next 12 months. A record-high 74% of respondents consider this to be a high risk; in fact, all top-five risks are linked to politics or possible fallouts from political disagreements, such as a China hard landing or a housing-market downturn.

Related Press ReleasePolitical Disagreements Unsettle Australian

Download the Full ReportAustralian Fixed-Income Investor Survey 4Q19

Muted Impact on Hong Kong Banks From Capital Buffer Reduction

The regulatory decision to reduce Hong Kong's countercyclical capital buffer (CCyB) will not materially change Hong Kong banks' lending behaviour in the near term.

Malaysia Budget Balances Consolidation with Growth Measures

Malaysia's 2020 budget contains modest fiscal easing of the deficit target in response to increased economic growth risks, but does not represent a significant shift in the government's consolidation efforts.

Global Telcos' 5G Capex Risk Contained; Leverage Stretched

5G capex risk for most telcos is likely to be contained over the next 18 months. However, the pressure to acquire wider spectrum bands to support future 5G rollout will reduce rating headroom.


Related Press Release:
Global Telcos' 5G Capex Risk Contained; Leverage Stretched

Japan Consumption Tax Rise Helps Medium-Term Fiscal Consolidation

Japan's consumption tax hike supports medium-term fiscal consolidation efforts, and the country's sovereign credit profile. It will lower Japan's debt ratio; however, very high public debt will remain a key credit weakness.


RelatedJapan Consumption Tax Rise Helps Medium-Term Fiscal Consolidation

2019 Milken Institute Asia Summit

China: Pathways to Prosperity in an Uncertain Era

Grace Wu, Head of Greater China Bank Ratings, joins other thought leaders at the 2019 Milken Institute Asia Summit in Singapore to discuss China and the potential risks and opportunities on the horizon against an uncertain geopolitical backdrop.

APAC Structured Finance Stable in 3Q19

Structured finance transactions in APAC continued their steady performance in 3Q19, with 94 transactions affirmed, seven upgraded, 20 assigned new ratings and one Rating Watch maintained.

Sri Lankan Bank Lending Rate Cap May Not Support Loan Growth

The lending rate cap recently imposed by the Central Bank of Sri Lanka (CBSL) on rupee-denominated loans extended by Sri Lankan banks may not improve loan growth in the short term. To the extent banks cannot price for risk in order to make hurdle rates of return, they may extend less credit for riskier consumer and commercial loans that carry higher losses.

Indian NBFCs Show Mixed Resilience to Testing Conditions

The more vulnerable NBFCs are likely to be wholesale and housing finance companies, which on average tend to operate with higher leverage and weaker asset-and-liability (ALM) maturity profiles, and face higher concentration risks. Tight liquidity and problems in parts of the property-development market are likely to keep these NBFC sub-sectors under pressure, at least in the near term.


Why did we downgrade Hong Kong?

Andrew Fennell discusses the key drivers behind our decision to downgrade Hong Kong to “AA” from “AA+”, with a “Negative” outlook at our Global Sovereign Conference in Hong Kong.


Overview on the Asia-Pacific Sovereign Ratings

Speaking from our recent Global Sovereign Conference, Stephen Schwartz provides an overview on APAC sovereign ratings, which are mostly stable except positive for Vietnam and Thailand, and negative for Hong Kong.

Weak Prices Hurt Asian Palm-Oil Producers' Earnings and Leverage

The nine palm-oil companies tracked by Fitch reported an average 26% rise in net debt/EBITDA in 2Q19, which resulted in a 92% yoy increase. We expect leverage at palm-oil producers to stay elevated throughout 2019, as prices are unlikely to recover significantly due to muted palm-oil demand and higher inventory from stronger 2H19 production.

Thailand's Economy, Banks Resilient to Rising Global Risks

Fitch Ratings (Thailand)'s annual global risk conference was attended by more than 300 executives and officials from the regulatory, investor, financial and corporate sectors. Dr Uttama Savanayana, Minister of Finance, was the guest of honour at the event and provided the keynote address.


Fitch Wins China Ratings Agency Award for Second Year Running

Fitch Ratings has been named the "Best International Ratings Agency" in FinanceAsia's China Awards for the second consecutive year.


Fitch Wins Best Rating Agency for Emerging Market Bonds at Global Capital Awards

We are pleased to announce we have been voted the Best Rating Agency for Emerging Market Bonds at this year's Global Capital Awards. "Analytical excellence is a core focus at Fitch and this further recognition from global market participants underlines the quality of our emerging market analysis and commentary, as well as our broader market outreach efforts," Brett Hemsley, Global Analytical Head for Fitch Ratings.

Learn more about Fitch and Emerging Markets

Fitch Ratings Voted Best Agency for Chinese USD Bonds in 3 Categories

Fitch Ratings has been voted the "Outstanding Rating Agency for Chinese Companies' USD Bonds" in three categories by users of Wall Street Trader, a financial web application widely used by participants in China's debt capital markets. 


Fitch Ratings Named Best Islamic Finance Rating Agency for Third Year

Fitch Ratings has been recognised as the Best Rating Agency for Islamic Finance for the third straight year by The Asset, a leading financial magazine in the Asia-Pacific.

China Private Education Blue Book

Revenue growth in China's private education sector, which consists of private schools and private education service providers, is likely to moderate to high-single-digits, from the low-teens.


Other Blue Books

You may also access the links below for more In-depth industry and bond market analysis:


Sing Chan Ng


Sing Chan Ng

Business Inquiries

+65 6796 7210

Stephen Schwartz


Stephen Schwartz


+852 2263 9938

Buddhika Piyasena


Buddhika Piyasena


+65 6796 7223

Jonathan Cornish

Financial Institutions

Jonathan Cornish


+852 2263 9901

Terry Gao

International Public Finance

Terry Gao


+852 2263 9972

Sajal Kishore

Global Infrastructure Group

Sajal Kishore


+65 6796 7095

Jeff Liew


Jeff Liew


+852 2263 9939

Ben McCarthy

Structured Finance

Ben McCarthy


+61 2 8256 0388

Bashar Al Natoor

Islamic Finance

Bashar Al Natoor

Analytical Group Head

+971 4424 1242

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