NEW YORK--(BUSINESS WIRE)--Link to Fitch Solutions' Report: Fitch Solutions Global CDS Liquidity Scores Commentary
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=654512
Fitch Solutions, a division of the Fitch Group, says that in the two weeks to 21 October a jump in CDS market uncertainty on the prospects for regional health care, utilities and technology companies helped drive average liquidity for Asian entities to the highest level since Fitch Solutions' CDS liquidity scores time series began in March 2006.
"Whilst Asian CDS still lag the higher levels of liquidity seen in Europe and North America, CDS on Asian oil and gas companies are now trading with more liquidity than for any other industry in the region," said Diana Allmendinger, Director, Fitch Solutions, New York.
"Among corporate names, Hutchison Whampoa Limited and Telekom Malaysia Berhad are third and fifth in the overall top five most liquid entities in the Asia Pacific region whilst Nippon Telegraph & Telephone Corporation also moved 11 regional percentile rankings in the past two weeks," Allmendinger added.
As of last Friday's market close, average CDS liquidity for Asian entities was 10.15 versus 10.33 two weeks previously (the lower the score the higher the CDS liquidity). Elsewhere, regional trends in Europe and North America remained broadly the same with average global CDS liquidity closing at 8.74 versus 9.03 for the same period.
The full Fitch Solutions' Global CDS liquidity scores commentary, which covers the top five most liquid CDS corporate names in Europe, North America and Asia, as well as the top five most liquid global sovereigns, is available at www.fitchratings.com under - "Fitch Solutions' Global Liquidity Scores Commentary Issue 61".
In general, the liquidity of a credit derivative asset increases when it is showing signs of financial stress in combination with a significant amount of debt outstanding and/or changes in its capital structure, including new issuance. The liquidity scores of assets have historically traded between 4 at the most liquid end, through to 29 at the least liquid end. Entities also tend to be more liquid when there is agreement about present value but disagreement about future value due to heightened uncertainty surrounding the entity.
Fitch Solutions, a division of the Fitch Group, focuses on the development of fixed-income products and services, bringing to market a wide range of data, analytical tools and related services. The division is also the distribution channel for Fitch Ratings content.
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