Moody’s: Indonesian non-financial corporates to see profit growth in 2017

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Singapore, November 24, 2016 — Moody’s Investors Service says that GDP growth in Indonesia will support an improvement in corporate earnings in 2017, which will benefit from recovering commodity prices and large infrastructure projects.

“The government reform agenda and increased infrastructure investment provide potential upside to the construction, building materials, property, and heavy equipment sectors,” says Brian Grieser, a Moody’s Vice President and Senior Analyst.

“In addition, higher commodity prices entering 2017 will benefit the country’s oil & gas, palm oil and coal sectors,” adds Grieser.

Moody’s conclusions are contained in its just-released 2017 outlook presentation for Indonesian non-financial corporates.

Moody’s continues to view commodity sectors as challenging over the medium term, but sees a potential earnings tailwind in 2017, given recent pricing gains off 2016 lows.

Elsewhere, Moody’s expects rated developers’ aggregated core marketing sales to decline in 2017 but one-off transactions will support revenue growth.

Moody’s also expects consumer spending on autos, motorcycles, white goods and consumer electronics to rebound off a subdued 2016, thereby supporting the performance of companies operating in those sectors.

Finally, Moody’s notes that the liquidity profiles of rated Indonesian corporates will remain stronger than those of other Asian companies, although still weaker than prior years.

Refinancing risk for high-yield bonds is manageable in 2017 but will begin to grow heading into 2018. Liability management exercises launched by a number of property companies to extend upcoming maturities will benefit the sector as it emerges from a weak 2016.

The post Moody’s: Indonesian non-financial corporates to see profit growth in 2017 appeared first on The Insider Stories.

Source: The Insiderstories
Moody’s: Indonesian non-financial corporates to see profit growth in 2017

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