30 Jul 2013
Flash: Malaysia downgrade - Nomura
FXstreet.com (London) - Research teams at Noumra said that the outlook downgrade to Negative by Fitch today is quite significant.
Key Quotes:
“…it is the first of the three major rating agencies to put Malaysia on Negative outlook”.
“All three rating agencies have Malaysia's rating at the same level (Fitch is at A- for Malaysia‟s long-term foreign currency debt) which is four notches above non-investment grade”.
“Fitch noted that Malaysia's reliance on oil-derived fiscal revenues (33.7% of overall revenues in 2012) and rising subsidies (4.7% of gdp in 2012) were two key vulnerabilities to its fiscal position”.
We believe this latest development is negative for MYR and supports our short MYR bias”.
Key Quotes:
“…it is the first of the three major rating agencies to put Malaysia on Negative outlook”.
“All three rating agencies have Malaysia's rating at the same level (Fitch is at A- for Malaysia‟s long-term foreign currency debt) which is four notches above non-investment grade”.
“Fitch noted that Malaysia's reliance on oil-derived fiscal revenues (33.7% of overall revenues in 2012) and rising subsidies (4.7% of gdp in 2012) were two key vulnerabilities to its fiscal position”.
We believe this latest development is negative for MYR and supports our short MYR bias”.