Country & Corporate Ratings, Easy Money & International Money Managers
By: Amit Bhushan Date: 19th Oct. 2015
That leverage on and on behalf of sovereign institutions does not impact credit ratings and associated flow of monies. The easy money policies of the central banks does further do the needful of ensuring that supported institutions are fully backed up with financing.
This is while the emerging markets continue to suffer on account of 'institutional weakness' and are not able to create enough borrowing institutions due to lack of effective linkages within their markets as well as abroad. Sadly these global bodies do not provide enough help in developing mechanism for such financing but only push for infrastructure ramp up.
All this results in corporate and country ratings of developing world to suffer while impeccability of developed world countries and corporates to service their debt is hardly in doubt. And that is in spite of the recent turbulence. It is the systemic linkages to service debt and keep growing businesses is the mantra for institutions and corporates in developed world. This ensure a ready ability to borrow and stay afloat. As long as this can be sustained, there may be a need to re-look at the financial situation.
This is while the emerging market institutions and corporates cannot be sure of growth and especially the systemically back growth piece of it, and therefore need to be assessed on the ability to pay back these loans with interest rather than just 'servicing', which is just about interest payment ability and capability to raise fresh loan as and when needed, say even to pay back old loans in some cases. This continues even with macro-economic changes, disruptions and the rise of new start-ups, resulting in fresh challenges for the 'old economy', however the credit ratings and fund flow data doesn't yet seem to be mimicking this trend.
This indicates that the old economy is still confident of being able to find new growth avenues and keep resulting in growth to sustain. This might actually hint at a rise in mergers and acquisition activity since most new growth seem to be possible with new avatars in emerging markets. In the absence of a rise in such mergers and acquisitions, expectations of venture vultures to take positions in starts up should rise as such venture vultures may build positions in entities which may sound promising to some of the 'old giants' as and when they have an appetite for growth and start finding specific market and sector attractive. To be developed further...
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By: Amit Bhushan Date: 19th Oct. 2015
That leverage on and on behalf of sovereign institutions does not impact credit ratings and associated flow of monies. The easy money policies of the central banks does further do the needful of ensuring that supported institutions are fully backed up with financing.
This is while the emerging markets continue to suffer on account of 'institutional weakness' and are not able to create enough borrowing institutions due to lack of effective linkages within their markets as well as abroad. Sadly these global bodies do not provide enough help in developing mechanism for such financing but only push for infrastructure ramp up.
All this results in corporate and country ratings of developing world to suffer while impeccability of developed world countries and corporates to service their debt is hardly in doubt. And that is in spite of the recent turbulence. It is the systemic linkages to service debt and keep growing businesses is the mantra for institutions and corporates in developed world. This ensure a ready ability to borrow and stay afloat. As long as this can be sustained, there may be a need to re-look at the financial situation.
This is while the emerging market institutions and corporates cannot be sure of growth and especially the systemically back growth piece of it, and therefore need to be assessed on the ability to pay back these loans with interest rather than just 'servicing', which is just about interest payment ability and capability to raise fresh loan as and when needed, say even to pay back old loans in some cases. This continues even with macro-economic changes, disruptions and the rise of new start-ups, resulting in fresh challenges for the 'old economy', however the credit ratings and fund flow data doesn't yet seem to be mimicking this trend.
This indicates that the old economy is still confident of being able to find new growth avenues and keep resulting in growth to sustain. This might actually hint at a rise in mergers and acquisition activity since most new growth seem to be possible with new avatars in emerging markets. In the absence of a rise in such mergers and acquisitions, expectations of venture vultures to take positions in starts up should rise as such venture vultures may build positions in entities which may sound promising to some of the 'old giants' as and when they have an appetite for growth and start finding specific market and sector attractive. To be developed further...
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