Mr. Pierre Yves Augsburger, Chief Investment Officer of Xeon International summarizes in his article about the recent development of ratings attributed by the rating agencies to the different countries.
“It is well known that global growth is put on the account of the economic growth of emerging countries. But it is less known by the public that the international rating agencies have massively upgraded the notes attributed to a great number of emerging countries. Xeon International with its positioning in the growth markets and countries has a real edge and will definitely support its clients businesses by making them benefiting from this secular trend.
The international press has more than covered the downgrading of the USA and France by Standard & Poor’s but has been relatively quiet concerning the improvement obtained by numerous emerging countries.
Beginning of 2012, Indonesia has accessed the category of investment grade while 9 countries of the Euro zone were downgraded by one or even two notches. In 2011, according to a study published by the US bank JP Morgan, the rating agencies have lowered 36 times the rating of a developed country and raised 38 times that of an emerging country.
Indonesia is now Baa3 according to Moody’s and has successfully reduced its debt which reached less than 30% of GDP. Indonesia with over 320 million inhabitants is moving towards the first economy of South-East Asia. One of the positive factors will be that Indonesian bonds will become accessible to many investment funds and insurance companies. It is also worth mentioning that the 2008 financial crisis had no negative impact on the ratings of emerging countries, whose banks were not affected by the sub-prime crisis or barely by the European meltdown.
According to Standard & Poor’s, the 13 countries that have been placed on positive outlook are all emerging countries. We would like to highlight that Asian economies are characterized by low public debt ratio and high private savings, this last point is also a characteristic that we may find in Luxembourg and Switzerland.” comments Mr. Augsburger
Xeon International aims to create long-term business value for its clients and investors by offering a unique blend of result-oriented, risk sharing strategic value creation and implementation services. It operates within four functional areas: Private Equity – Corporate Finance – Growth Management Advisory and Family Office Services.
Our teams consist mainly of experienced managers with deep theoretical and practical knowledge of their areas of specialisation which ensures rapid comprehension of relevant strategic and operational issues and a solid implementation of solutions. We devise innovative and result-oriented ways to create business value for our clients and investors.