Corporate defaults in Asia set to rise, with hot spots in China, India

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Companies in the region have been on a buying spree fueled by debt. FMTNews

Those factors could make things even worse in 2020 after China onshore defaults rose to a record in 2019.A rise in defaults would likely further weigh on investor sentiment, and raise the cost of borrowing for the riskiest firms.

The nation’s real estate firms, traditionally seen as the bulwark of the economy, could also be vulnerable. A wave of acquisitions has also prompted companies with overextended balance sheets to stumble. Shandong Ruyi Technology Group Co., which made a string of overseas purchases, including U.K. trench coat maker Aquascutum, has been struggling to repay debt. Singapore-headquartered MMI International Ltd., which was sold to a Chinese buyout group, has missed loan repayments.

In Southeast Asia, oil and gas companies are still reeling from depressed oil prices. There has been an “uptick” in defaults in Malaysia and a few companies have had to restructure debt with lenders, according to Kidd.

 

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Soon their debts will be surmounted on top of the companies without De-leverage it soonest if.

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China regulators concerned after bond repayment failures hit record highCountry's onshore bond defaults have exceeded 130 billion yuan so far this year. FMTNews
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