20160613-穆迪服务-Portugal_s_Large_Deficit_and_Sluggish_Economy_Push_Sovereign_Risk_Measures_Higher_16页_576kb

Moody's Sovereign Risk Report Summary (June 13, 2016)

Core Content

This report provides an analysis of sovereign credit risk measures across various countries, focusing on the rise in Portugal's sovereign risk and the broader context of other European and Asian economies.

Main Points

• Portugal's Sovereign Risk Increase:

  • Portugal's five-year sovereign EDF (Expected Default Frequency) increased from 0.54% to 0.59% in the week ended June 10, 2016.
  • The increase is attributed to a rekindling of long-standing economic and fiscal problems since 2009.
  • Portugal's gross government debt remains at 128% of GDP, making it vulnerable to economic fluctuations.
  • The Portuguese economy is sluggish, with a projected growth of 1.3% in 2016, compared to Spain's 3.2% growth in 2015.
  • The country's largest bank, Caixa Geral de Depósitos, is state-owned and may require up to €4 billion in support, contributing to sovereign risk.
  • The European Commission's decision to delay deficit penalties for Portugal and Spain has increased market perception of non-enforcement of rules, further raising sovereign risk.

• Factors Influencing Sovereign Risk:

  • Economic slowdown and fiscal deficit concerns are key drivers of increased sovereign risk.
  • Government's ability to meet deficit targets is questionable, with expectations of a 2.2% deficit for 2016, though the EU and analysts believe it will be higher.
  • The report highlights the interplay between economic performance, fiscal health, and political developments in shaping market perceptions.

Key Information

Portugal

• Sovereign EDF (1-Year): Increased from 0.05% to 0.06% (June 10, 2016).
• Sovereign EDF (5-Year): Increased from 0.50% to 0.59% (June 10, 2016).
• CDS Implied-Rating: Ba3 to B1.
• Bond Implied-Rating: Baa2 to Baa3.
• Senior Rating: Ba1.

Other Countries

• Asia-Pacific:

  • Australia: Sovereign EDF (5-Year) decreased by 1 bps.
  • China: Sovereign EDF (5-Year) increased by 3 bps.
  • Hong Kong: Sovereign EDF (5-Year) increased by 1 bps.
  • Indonesia: Sovereign EDF (5-Year) decreased by 7 bps.
  • Japan: Sovereign EDF (5-Year) decreased by 5 bps.
  • Korea: Sovereign EDF (5-Year) remained stable.
  • Malaysia: Sovereign EDF (5-Year) remained stable.
  • New Zealand: Sovereign EDF (5-Year) decreased by 1 bps.
  • Philippines: Sovereign EDF (5-Year) decreased by 1 bps.
  • Thailand: Sovereign EDF (5-Year) decreased by 5 bps.
  • Vietnam: Sovereign EDF (5-Year) decreased by 2 bps.

• Europe:

  • Austria: Sovereign EDF (5-Year) decreased by 2 bps.
  • Belgium: Sovereign EDF (5-Year) remained stable.
  • Croatia: Sovereign EDF (5-Year) decreased by 22 bps.
  • Cyprus: Sovereign EDF (5-Year) decreased by 75 bps.
  • Czech Republic: Sovereign EDF (5-Year) decreased by 6 bps.
  • Denmark: Sovereign EDF (5-Year) decreased by 6 bps.
  • Estonia: Sovereign EDF (5-Year) decreased by 5 bps.
  • Finland: Sovereign EDF (5-Year) decreased by 1 bps.
  • France: Sovereign EDF (5-Year) decreased by 1 bps.
  • Germany: Sovereign EDF (5-Year) decreased by 1 bps.
  • Greece: Sovereign EDF (5-Year) decreased by 538 bps.
  • Hungary: Sovereign EDF (5-Year) decreased by 9 bps.
  • Iceland: Sovereign EDF (5-Year) decreased by 33 bps.
  • Ireland: Sovereign EDF (5-Year) remained stable.
  • Italy: Sovereign EDF (5-Year) decreased by 1 bps.
  • Latvia: Sovereign EDF (5-Year) decreased by 7 bps.
  • Lithuania: Sovereign EDF (5-Year) decreased by 8 bps.
  • Netherlands: Sovereign EDF (5-Year) remained stable.
  • Norway: Sovereign EDF (5-Year) increased by 1 bps.
  • Poland: Sovereign EDF (5-Year) decreased by 2 bps.
  • Romania: Sovereign EDF (5-Year) decreased by 13 bps.
  • Russian Federation: Sovereign EDF (5-Year) decreased by 48 bps.
  • Serbia: Sovereign EDF (5-Year) decreased by 2 bps.
  • Slovakia: Data incomplete.

Summary

The report highlights that Portugal's sovereign credit risk has significantly increased in 2016 due to a combination of economic stagnation, high government debt, and potential banking sector support needs. These factors have led to a doubling of its sovereign risk measures since the beginning of the year, making it the worst-performing sovereign in 2016. The report also provides insights into the sovereign risk trends of other countries in Asia-Pacific and Europe, noting both increases and decreases in risk measures. The European Commission's delayed enforcement of deficit penalties has influenced market perceptions, further impacting sovereign risk assessments.