China: S&P rating cut shows concerns over debt - BBH
|S&P cut China's sovereign debt rating (first time since 1999), expressing concerns over its debt and it followed up today by taking away Hong Kong's AAA rating, notes the analysis team at BBH.
Key Quotes
“The reason for the HK move was the potential for spillover from deleveraging on the mainland. Note that when Moody's downgraded China four months ago, it also followed up by cutting Hong Kong's rating as well. Incidentally, of the eleven sovereigns that S&P still sees as AAA, only Australia has a negative outlook. The Hang Seng is surrendering most of the week's gains today, but more broadly, the MSCI Asia Pacific Index is recorded its second consecutive losing session for the first time in nearly a month. The regional benchmark is extending its advance for a sixth consecutive week. It has fallen once in the past 11 weeks.”
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