Recent downgrades by international ratings agencies reflect economic and political risks in Thailand. As a result businesses, especially those with weak financial status, need to do more to prepare funding plans for their long-term investments, according to Kasikorn Research Center.
The market has partially absorbed economic risk over almost the past four years, but Thailand has been facing protracted political tension as well.
In December last year, five international rating agencies: S&P, Fitch, Rating & Investment Information (R&I), Japan Credit Rating Agency (JCR) and Moody's Investors Service downgraded the country's rating outlook from stable to negative though they maintained the overall sovereign ratings.
However, in the medium or long term, increasing financial costs might affect businesses operations and funding plans for new investments by the private sector. As a result, businesses should prepare early based on the assumption that credit ratings would not be upgraded.
Nice to finally see something in the news that we did a lot of studying on. Hopefully Thailand can bounce back and pull themselves up on the ratings.
Mary Baumer (Thailand)
Sunday, April 19, 2009
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