rating agencies

Rating Agency Fitch downgraded the Debt Rating of Sony Corp. and Panasonic Corp.

Fitch, the rating agency in 3rd week of November 2012 downgraded the debt rating of Japan’s Sony Corp and Panasonic Corp to Junk status. The ranking of the two corporations were downgraded because of the weakness measured in their TV Operations and Consumer Electronics and the low demand that these brands suffered due to the tough competition faced by the competing brands Apple Inc. and Samsung.

Sony Corp. and Panasonic Corp. together suffered a major loss of 20 billion dollar in 2011 due to which both the firms managed to cut jobs, sold their assets and closed many facilities round the globe. The recent protests in China against Japan and the Japanese products also was a reason for this lack in demand.

Sony was downgraded from BBB- minus to BB- minus, which was degradation of three notches from its previous position, by Fitch. Whereas, Panasonic was downgraded from BBB-minus to BB status, that was two notches below the previous ranking.

Rating from Other Agencies 

The other two rating agencies, the Moody's Investors Service has rated both these electronic majors in the status of Baa3, this is the lowest of the high-grade category and the Standard & Poor's has rated both the electronic making companies at BBB status, which is the-second lowest of the investment grade. The ranked status would diminish the shine of the world-acknowledged Japanese Brand.

India growth forecast slashed: CRISIL
 Rating agency CRISIL has slashed India’s growth forecast to 5.5%. It is the second cut for fiscal 2013 estimate.
Earlier, the agency had cut GDP growth to 6.5%.
 Deficient rainfall and worsening Eurozone situation are the main causes behind the decline.
 As per CRISIL, the sluggish growth is expected to put pressure on government finances. Fiscal deficit may also
expand to 6.2% of GDP in 2012-13 from the previous estimate of 5.8 %.
 As per the agency the Indian govt may see a dilemma on whether to provide a stimulus or not because if it
infuses the economy with stimulus then along with some boost to growth its fiscal deficit will soar further.
 Likewise, high inflation will be another hindrance to the RBI in aggressively cutting rates to stimulate the
economy.

Standard & Poor’s lowers India’s rating outlook to negative, warns
of downgrade
Standard and Poor’s (S&P), the Global rating agency has lowered India’s rating outlook to -ve citing slow progress on its
fiscal situation, as well as deteriorating economic indicators. S&P has also warned of a further downgrade India’s rating
in 2 years if there is no improvement in the fiscal situation.
Implications:-
 The lowering of outlook from stable, to -ve is expected to make ECB (External Commercial Borrowings) expensive
for Indian companies.
 It may also have implications for the capital market.
S&P held that the investment and economic growth slowed whilst the CAD (Current Account Deficit) widened. In 2011,
S&P had stripped the U.S. of its respected AAA credit rating.

Moody’s upgrades India’s short-term foreign currency rating

 Global rating agency Moody’s upgrades India’s short-term foreign currency rating from speculative to investment

grade.

 The upgrading would help domestic companies to raise funds from overseas markets at better rates.

 The latest upgrade comes less than a month after Moody’s had upgraded the credit rating of Indian

government’s bonds from speculative to investment grade, a move that was expected to encourage Foreign

Institutional Investors increase their exposure in gilts and help companies raise funds from abroad at competitive

rates.

Nomura slashes India GDP growth projection to 5.8%

NOMURA:

A Japanese multinational conglomerate, or zaibatsu of financial services, financial management consulting companies and related organizations, headquartered in the Nihombashi district of Tokyo, Japan.

The Nomura Group is involved in diversified industries, such as oil and gas,construction, chemicals and FMCG, but internationally the group is known as a financial services, financial management consultancy group, through the global presence of its holding company - Nomura Holdings, Inc. & its direct, indirect subsidiaries.

India displaying delayed effects of anti-inflation

policies: Fitch

According to Global rating agency Fitch, India, China and Korea -- three most

powerful emerging Asian economies -- are exhibiting delayed effects of tight

monetary policies introduced in 2010-11 to tackle inflation.

According to Fitch:

Slow upgrading in financial position of countries including India and China has

come in the way of positive credit rating drive in rising Asia.

India's WPI inflation was 7.55% and the Consumer Price Index (CPI) inflation

for was 10.36% for May 2012

B/w March 2010 and October 2011 RBI had slashed repo rates 13 times to

battle against inflation

India's GDP plunged to nine-year low of 5.3% for the three months ended

March 2012

The overall growth for 2011-12 stood at 6.5%

China has a negative outlook on but it is positive for Korea

Positive rating momentum in emerging Asia has come to a standstill amid lethargic

improvement in sovereign balance sheets and for a few countries, concerns over

high and rising leverage in the private sector

Fitch had downgraded GDP growth projections to 6.5% in 2012-13, reduced

from a previous projection of 7.5%. It has already downgraded India's credit

outlook to negative and attributed it to corruption and lack of reforms.