Corporate Asia has taken advantage of ultra-low interest rates over the past few years, loading up on debt, but with rates set to rise, there may be risks ahead.
“With the U.S. Federal Reserve expected to begin normalization of policy early next year, so too will begin the end of a prolonged downtrend in borrowing costs for corporates,” ANZ said in a note last week. “Corporate Asia — [which] has benefitted significantly from the abundance of liquidity in this low interest rate environment — is not entirely immune.”
Overall, ANZ believes Southeast Asian and Indian corporates didn’t overextend themselves, with economies likely to continue growing robustly and companies likely to remain profitable.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.