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Malay Mail
a day ago
- Business
- Malay Mail
Fitch Ratings flags trade war risk in Asia but Malaysian banking outlook stays firm
KUALA LUMPUR, June 19 — Fitch Ratings has maintained its 'neutral' outlook on Malaysia's banking sector for 2025 while adjusting the outlooks for several Asia-Pacific countries amid trade war exposures. The rating agency said it has adjusted its outlooks for the banking sectors in South Korea, Taiwan, Thailand and Vietnam to reflect weaker prospects for banks in 2025 amid exposures related to the United States (US) trade policies, though the overall banking sector outlook for Asia-Pacific remains 'neutral'. It downgraded the outlooks for South Korea, Taiwan and Thailand to 'deteriorating' from 'neutral' at the start of 2025, while the outlook for Vietnam was revised to 'neutral' from 'improving' previously. 'We maintain the 'deteriorating' outlook on China's banking sector, reflecting persistent challenges for banks, as government policies weigh on profitability and banks experience asset quality pressure from a weaker economy and property sector,' it said in a statement today. Among the emerging markets, Fitch has kept a 'neutral' outlook on banking sectors in India, Indonesia, the Philippines, and Mongolia. On the 'deteriorating' outlooks for banking sectors in South Korea, Taiwan and Thailand, Fitch said this is partly because banks' loan growth, asset quality and profitability will likely weaken in these markets as tariffs rise, given their higher export exposure and sales to the US. 'There is great uncertainty around the ultimate trajectory of US tariffs, but Asia-Pacific's high degree of trade openness and its exposure to US demand leave it particularly vulnerable to potential US tariff increases. 'For the most affected banking systems, lower profitability and weaker asset quality would be key channels for contagion from the tariffs,' it said. However, it added, the ultimate effects of the trade war on regional bank sectors would depend on final tariff outcomes, their impact on local economic growth, banks' exposure to vulnerable sectors, and the potential for changes in fiscal, monetary or credit policy. — Bernama
The National
a day ago
- Business
- The National
UAE investors warn about red flags to avoid in a property transaction
Gunjan Chaurasia, a Dubai resident since 2006, purchased a four-bedroom villa in Sharjah's Masaar 2 community for more than Dh4 million ($1.08 million) in March. The project is scheduled to be delivered in 2027. The Canadian, 41, decided to buy based on the project's amenities and facilities, developer Arada's credentials and infrastructure around the community. She also owns apartments in Dubai's Jumeirah Lakes Towers, India and Canada. Citing the biggest red flag to a property purchase, she says if something sounds too good to be true, it probably is. If a property is big in size, but comes at a very low price point, then there is a hidden issue that you're not aware of, she warns. 'Another issue is that a lot of buyers look at the price of the unit, but don't look at the service charges. Also, always check the price per square foot. A unit may be very reasonably priced, but the area may be small,' she says. 'Always go for a good location and a good building. You need to check for plumbing and do a thorough inspection, but I wouldn't be too concerned about the cabinet colour, for instance, because these issues can be fixed. Most importantly, check the surrounding infrastructure, facilities and amenities such as schools, hospitals, entry and exit points.' Last month, a report by New York-based Fitch Ratings predicted that Dubai's real estate market would enter a 'moderate correction' in the second half of 2025 as a record number of projects launch. The ratings agency also estimated that residential prices could fall by as much as 15 per cent this year. However, industry experts remain confident in the market's potential, citing Dubai's record population growth, continuing housing demand and maturing real estate sector as indicators that any correction will likely be moderate. Clarity of purpose Ms Chaurasia urges buyers to always think about the reason behind their property purchase. Agreeing with her, P.P. Varghese, head of professional services at Cushman & Wakefield Core, says that for investment purchases, the decision framework should follow yields. The rule of thumb is straightforward: if your rental yield can cover your mortgage, you have a sustainable foundation. If the rent cannot cover your mortgage payments, the investment must make sense purely as a capital appreciation play, he says. The ideal scenario combines sufficient yield to cover the mortgage with surplus cash flow, plus capital appreciation potential, he reckons. For end-use purchases, Mr Varghese urges buyers to start by identifying their purchasing power, then take a look at whether that price point can achieve their dream home. Ms Chaurasia warns buyers not to overleverage and have a financial backup to service their mortgage in case of an emergency. Have an idea of what percentage of your income you can commit towards housing, she adds. Developer's track record Similarly, Elena Yurgeneva, a property owner, deters people from buying from a developer with no proven track record in the UAE. 'If you can't physically visit or verify their previous projects, it becomes very hard to assess build quality, delivery timelines, or even how reliable they are in honouring handover commitments,' she says. Citing a 'regrettable investment' in the Golf Views project by Seven Tides, Ms Yurgeneva says construction has been delayed multiple times and is currently stalled. 'The project has been frozen at least twice since my purchase, and to date, there's no clear communication or visible progress on site. It's a painful reminder that even projects that look promising on paper can face serious execution risks,' she warns. When purchasing property anywhere in the world, including the UAE, buyers should watch for red flags across all stages of the transaction. These could manifest as disparities between listings and viewings, poor maintenance and high-pressure sales tactics, among others. Inspect broker credentials Even within Dubai's structured and well-regulated real estate market, the margin for error lies in process shortcuts, documentation gaps and intermediary inconsistencies, explains Farooq Syed, chief executive of Springfield Properties. 'In Dubai, all brokers are required to be licensed by the Real Estate Regulatory Agency. Buyers should always request the broker's Rera ID. A lack of transparency around this, refusal to facilitate physical viewing, or reliance on heavily staged or misleading visuals should be treated as a red flag,' he warns. 'Payment channels are equally non-negotiable. In the off-plan segment, the project must be officially registered with the Dubai Land Department, and all payments are to be made directly to the project's escrow account. For resale transactions, payment must be made directly to the seller, not to the broker or any third-party entity.' Unpaid service charges Zacky Sajjad, director of business development and client relations at property consultancy Cavendish Maxwell, picks legal issues such as unpaid service charges, unresolved mortgages, or invalid power of attorney as some risks, and also building-level concerns like developer or owner's association disputes, excessive service charges, and incomplete utility connections. He also urges caution dealing with offshore ownership structures. To mitigate these risks, buyers should always engage a licensed conveyancer or valuer, insist on official Rera forms and no-objection certificates, and verify the property's legal ownership, title deed and presence of any mortgage or disputes by scanning its QR code through the DLD or the Dubai Rest app, Mr Sajjad recommends. Request a formal, RICS-compliant or bank-approved valuation before agreeing to the price, he adds. Also, inspect the property in person to confirm condition, maintenance and ensure everything is as per the listing. Understand total cost of ownership One of the biggest risks for any buyer is pricing decisions driven by sentiment rather than data, Mr Varghese warns. Valuations should be anchored to recent comparable sales, rental yields and projected supply, particularly for off-plan properties, he explains. Buyers must also remember that the total cost of ownership extends beyond service charges to include maintenance reserves, insurance, potential major repairs (especially for older buildings), while for new developments, it includes community fees, sinking funds and utility connections, according to Mr Varghese. 'For investment properties, factor in vacancy periods and property management costs. These hidden costs can significantly erode returns if not properly accounted for upfront,' he says. Confirm handover timelines Mr Syed of Springfield Properties says completion dates must be clearly defined and contractually stated in off-plan deals. A lack of specificity around handover timelines should be treated as a material risk, he warns. 'In investment properties, tenancy terms must be reviewed. Properties with unpaid rents, invalid eviction notices, or leases that fall short of the legal 90-day notice requirement may lead to complications post-transfer,' he says. 'Similarly, unauthorised modifications, particularly in villas, should be reviewed closely. A snagging expert can help identify defects or alterations not captured in the marketing narrative.' Consider area development Mr Varghese warns buyers not to avoid undertaking due diligence on area development. Understand the broader area's development pipeline, as oversupply can hurt both rental yields and capital appreciation, he says. Research infrastructure development plans, new transport links, and zoning changes that could enhance or diminish property values over your intended holding period, he adds. 'Beyond price, buyers should negotiate holistically: payment schedules, escrow arrangements, delivery guarantees, and any fit-out or completion obligations can carry substantial financial implications and should be scrutinised as part of any transaction,' he suggests. Tips for non-resident UAE investors While there are no hidden fees for non-resident UAE investors, broker commission, DLD registration and trustee fees apply as standard, Mr Syed says. However, he warns that paperwork requirements can be extensive and processing may take longer due to additional documentation. Mortgage access remains limited for non-residents, and timelines may be affected depending on nationality, financing method and complexity of regulatory approvals, he explains. Cross-border fund transfers may also be subject to regulatory or institutional constraints, he adds.
Business Insider
2 days ago
- Business
- Business Insider
Fitch upgrades Ghana's credit rating to ‘B-‘; Outlook Stable
Global credit ratings agency Fitch Ratings has upgraded Ghana's Long-Term Foreign-Currency Issuer Default Rating (IDR) from 'Restricted Default' to 'B-', assigning a Stable Outlook. Ghana's credit rating has been upgraded from 'Restricted Default' to 'B-' by Fitch Ratings, with a Stable Outlook. Inflation has significantly decreased, reaching its lowest level in three years, supported by tighter monetary policies and improved currency stability. The Ghanaian economy has shown improved fiscal health, including higher gross international reserves and reduced public debt-to-GDP ratio. This significant development reflects growing investor confidence in the West African nation's economic recovery, spearheaded by Finance Minister Dr Cassiel Ato Forson. Eurobond restructuring and external debt talks drive upgrade Fitch's positive assessment follows Ghana's notable achievements in debt restructuring, particularly the successful renegotiation of $13.1 billion in Eurobond liabilities. The country has also made substantial progress in discussions with its remaining external creditors and is expected to conclude the full restructuring process by the end of 2025. The agency commended Ghana for restoring normal relations with the majority of its commercial lenders, suggesting that the country is re-establishing its financial credibility after a turbulent period. Inflation falls to three-year low as Cedi strengthens One of the most encouraging indicators highlighted in the report is Ghana's rapidly declining inflation. The rate has fallen from 23% in 2024 to 18.4% in May 2025—the lowest level recorded in over three years. Fitch projects that inflation will continue to fall, averaging 15% in 2025 and dropping further to 10% in 2026. This downward trend is being driven by a combination of tight monetary policy, prudent fiscal management, and improved currency stability. The Ghanaian cedi has seen significant appreciation in recent months, reversing earlier depreciation trends and easing pressure on import prices, including fuel. Fitch attributed the cedi's turnaround to 'renewed confidence in Ghana's macroeconomic fundamentals and coordinated interventions by the Ministry of Finance and the Bank of Ghana.' Public finances improve as debt and deficit decline Under the direction of Dr Ato Forson, the government has implemented a robust economic recovery strategy focused on fiscal consolidation, debt sustainability, and rebuilding investor trust. Key achievements under his leadership include: Public debt-to-GDP ratio Projected to fall to 60% in 2025 (from 93% in 2022) Gross international reserves Increased to $6.8 billion and rising Fiscal performance Primary surplus of 0.5% of GDP projected in 2025 Interest payments as share of revenue Down to 25% from a peak of 48% in 2021 Real GDP growth 5.7% in 2024; projected 4% in 2025 Senior officials at the Ministry of Finance attributed these improvements to 'the Finance Minister's bold and consistent policy direction', adding that the upgrade 'underscores the success of Ghana's path towards economic stability.' The upgraded rating is expected to enhance Ghana's appeal to international investors, support the revival of domestic capital markets, and alleviate fiscal pressures. Dr Forson, speaking earlier this month, reaffirmed the government's commitment to maintaining discipline: 'We are building an economy that works for everyone. This upgrade is a signal that Ghana is back on track, and we will not relent in protecting the gains we've made.' A turning point for Ghana's economy
Arabian Post
2 days ago
- Business
- Arabian Post
Ghana's Credit Score Rises to ‘B-' as Debt Talks Progress
Fitch Ratings upgraded Ghana's long‑term foreign currency sovereign rating from 'restricted default' to 'B‑' on 16 June, accompanied by a stable outlook. The move reflects substantial progress in debt restructuring after the West African nation normalised relations with a large majority of its external commercial creditors. Ghana's economy endured its most severe crisis in decades, driven by collapses in its cocoa and gold sectors. The government's proactive restructuring of its debt burden laid the groundwork for this upgrade, with Fitch forecasting completion of external debt restructuring by the end of 2025. The 'B‑' rating places Ghana closer to investment‑grade territory and signals increased investor confidence. The stable outlook indicates that Fitch does not expect near‑term negative shocks to derail Ghana's fiscal consolidation. It reflects continued fiscal discipline and political commitment to structural reform following President John Dramani Mahama's inauguration in January. Finance Minister Cassiel Ato Forson has already implemented significant spending cuts, part of a broader strategy to restore macroeconomic stability and rebuild international credibility. These measures were reinforced by a similar move from S&P Global Ratings in May, which upgraded Ghana's foreign currency issuer rating to 'CCC+' from 'selective default'. Together, these upgrades underscore growing confidence in Ghana's recovery trajectory. ADVERTISEMENT Fitch's report highlights that servicing foreign currency debt—including domestic‑issued dollar bonds—is projected to consume around 1.2 per cent of gross domestic product in 2025, rising modestly to 1.4 per cent by 2026. Domestic currency interest costs for the same period are estimated at approximately 3.8–3.9 per cent of GDP, with total debt servicing ratios stabilising after peaking at 48 per cent in 2021. On the external front, Fitch projects Ghana's current account surplus, which peaked at around 4.3 per cent of GDP in 2024, will moderate to about 1.1 per cent by 2026 due to increased import demand and softer export commodity prices. However, inflation, which stood at 23 per cent in 2024, is expected to subside to around 15 per cent by the close of 2025 and further to 10 per cent in 2026, aided by a strengthening cedi and disciplined monetary policy. Fitch anticipates economic growth to remain robust at about 4 per cent in 2025, accelerating to approximately 4.5 per cent in 2026. This expansion will be driven by recovery in the agricultural sector—especially cocoa production—and continued momentum in the industrial and services sectors. Despite the positive assessments, Fitch has emphasised key risks that could undermine its stable outlook. Chief among these are renewed liquidity pressures, potential loss of confidence in Ghana's ability to refinance short‑ and medium‑term obligations, and strains on external reserves if the current account deficit widens unexpectedly. Investor sentiment is likely to sharpen its focus on Ghana's ability to fully deliver on its debt restructuring plan and preserve macroeconomic stability. As the country moves toward concluding bilateral and bondholder agreements by year‑end, the global market will be assessing not just the formal rating upgrade, but the implementation of structural reforms and fiscal prudence underpinning it. This credit progression carries implications beyond bond markets. It enhances Ghana's standing in international financial circles, potentially lowering its cost of future borrowing and attracting foreign direct investment. It also sets a precedent for other African nations navigating debt distress in the wake of global commodity and financial volatility.
Yahoo
2 days ago
- Business
- Yahoo
DEMIRE bond 2019/2027: Initial rating B from Fitch
DEMIRE bond 2019/2027: Initial rating B from Fitch Langen, 18 June 2025. Fitch Ratings has assigned DEMIRE Deutsche Mittelstand Real Estate AG ('DEMIRE'; ISIN: DE000A0XFSF0) an issuer rating of 'CCC+' for the first time. Fitch Ratings has granted the bond (ISIN: DE000A2YPAK1) a 'B' rating due to the underlying collateral structure. The ratings reflect the assessment of DEMIRE's EUR 0.8 billion commercial portfolio. Following a debt restructuring supported by the main shareholder in the second half of 2024, DEMIRE aims to further reduce its outstanding bond debt. The bond, which is rated 'B' by Fitch Ratings, matures at the end of 2027. With a loan-to-value of around 35% at the end of 2024 as calculated by Fitch Ratings, DEMIRE's focus is on strengthening its rental and financial stability. From the agency's perspective, the debt relief measures initiated and the support of the main shareholders support DEMIRE's future financial recovery. The rating from Fitch Ratings is effective immediately and will be monitored on an ongoing basis and reviewed once a year. Tim Brückner, CFO of DEMIRE: "With Fitch Ratings, another rating agency besides Scope has given our bond a B rating. We are pleased about DEMIRE's increasing transparency for our investors and are endeavouring to further improve the rating wherever possible." End of press release About DEMIRE Deutsche Mittelstand Real Estate AG DEMIRE Deutsche Mittelstand Real Estate AG acquires and holds commercial properties in medium-sized cities and up-and-coming peripheral locations in metropolitan areas throughout Germany. The company's particular strength lies in realising real estate potential in these locations and focuses on an offering that is attractive to both international and regional tenants. As of 31 March 2025, DEMIRE had a real estate portfolio of 49 properties with a lettable area of around 594 thousand square metres. Taking into account the proportionately acquired Cielo property in Frankfurt/Main, the market value amounts to around EUR 1.0 billion. The portfolio's focus on office properties with an admixture of retail and hotel properties is appropriate for the risk/return structure of the commercial property segment. The Company attaches great importance to long-term contracts with solvent tenants and the realisation of potential and therefore continues to expect stable and sustainable rental income and solid value growth. DEMIRE's portfolio is to be significantly expanded in the medium term. In expanding the portfolio, DEMIRE will focus on FFO-strong assets with potential, while properties that do not conform to the strategy will continue to be sold in a targeted manner. DEMIRE will continue to develop its operations and processes with numerous measures. In addition to cost discipline, operating performance is being improved through an active asset and portfolio management shares of DEMIRE Deutsche Mittelstand Real Estate AG (ISIN: DE000A0XFSF0) are listed in the Prime Standard of the German Stock Exchange in Frankfurt. Contact: Julius StinauerHead of Investor Relations & Corporate FinanceT: +49 6103 372 49 44E: ir@ in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
