Thailand
Auto, retail, hospitality and gaming seen as hardest hit sectors in region, Cambodia not spared
Moody’s Investors Service says its negative outlooks for non-financial companies in the Asia-Pacific region are dominated by the auto, retail, hospitality and gaming sectors.
In a report released in Hong Kong on Monday, the US rating agency said credit trends in the region would “remain negative” in 2020.
“The coronavirus pandemic has massively disrupted global economic growth and supply chains and pressures corporate credit quality,” it said.
The impact from this, local analysts said, will have far reaching implications as people are losing jobs, having salary cuts, and other actions which has impacted daily life and spending habits, thus triggering a multiplier effect.
“We take note of Moody’s report. In Cambodia we face issues which are more than just these sectors reported as tourism is almost at zero percent currently because of the travel bans imposed in the whole country and while flights have resumed in some countries or to be resumed in coming weeks, Cambodia is not on their list.
“These impacts tourism, business, economy, hospitality and eateries as well as transport operators of coaches or buses and ride sharing operators such as grab and passup. Every sector has been impacted and we have work to do get the economy moving again and avoid a recession or negative growth as predicted by IMF,” the officials said.
Gaming operations in Cambodia has been closed since midnight of April 1, impacting thousands of workers and supply chain of services and products. In the capital alone, several thousand workers are impacted and stand the possibility of layoffs if the ban lingers for long.
Other service sectors are also impacted with the shut down, temporarily of many outlets to obey the government’s directives and these have a direct impact on the economy and daily survival needs.
Moody’s said 26 percent of its ratings for non-financial companies in the region had negative implications at the end of March — up from 17 percent at the end of December.
The share of ratings with stable outlooks slid from 79 percent to 71 percent over the same period.
“Auto companies, retailers, hospitality and gaming sectors are the hardest hit with over 50 percent of the issuers having ratings with negative implications,” the report said.
Negative implications refers to company outlooks that are negative or credit ratings that are under review for possible downgrades.
In terms of rating actions, Moody’s said the trend for the non-financial companies it rates in the region was “overwhelmingly negative” in the three months to March.
During the quarter, the rating agency said it took 120 negative and 5 positive actions.
China accounted for 24 percent of the negative actions followed by Japan (21 percent), Australia and New Zealand (13 percent combined), South Korea (10 percent), India and Singapore (both 10 percent), Indonesia (6 percent) and Hong Kong (5 percent).
Auto parts assembly has been an increasingly important part of foreign investment in Cambodia in recent years, especially by Japanese auto companies in Thailand that have been shifting some operations here. Sao Da/AKP/Khmer Times
Source: https://www.khmertimeskh.com/50715342/auto-retail-hospitality-and-gaming-seen-as-hardest-hit-sectors-in-region-cambodia-not-spared/