Fitch Ratings has revised India’s Outlook to Stable from Negative and affirmed its Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at ‘BBB-’. The agency has also affirmed the Country Ceiling at ‘BBB-’ and the Short-Term Foreign-Currency IDR at ‘F3′.

KEY RATING DRIVERS

The revision of the Outlook to Stable reflects the measures taken by the government to contain the budget deficit, including the commitments made in the FY14 budget, as well as some, albeit limited, progress in addressing some of the structural impediments to investment and economic growth.

The Outlook revision and the affirmation of India’s investment-grade ratings reflect the following factors:

- The authorities were successful in containing the upward pressure on the central government budget deficit in the face of a weaker-than-expected economy. The central government fiscal deficit was 4.9% of GDP in FY13 (financial year ended March 2013), compared with 5.7% in FY12 and Fitch’s forecast when it placed India’s ratings on Negative Outlook in June 2012 of close to 6%.

- Fitch expects the government to broadly meet its FY14 budget deficit target of 4.8% of GDP (including privatisation receipts) and to gradually reduce the high level of public debt over the medium-term. General government gross debt (GGGD) as a share of GDP was at 64% in FYE13, significantly higher than both the ‘BB’ and ‘BBB’ peer rating group medians of 33% and 40% respectively. However, it is substantially below the level of 79% of GDP when Fitch upgraded India to ‘BBB-’ in 2006. >> Read More

This announcement corrects the version published earlier today, in which Indian Bank’s Support Rating (SR) and Support Rating Floor (SRF) were incorrect.

Fitch Ratings, Singapore, 03 June 2013: Fitch Ratings has today affirmed the Long-Term Issuer Default Rating (IDR) of IDBI Bank Ltd. (IDBI) and Indian Bank (IB) at ‘BBB-’. Simultaneously, Fitch has also affirmed IDBI’s Viability Rating (VR) at ‘bb’ and that of IB at ‘bbb-’. IDBI’s SR and SRF have also been affirmed at ’2′ and ‘BBB-’ respectively, while those of IB have been affirmed at ’3′ and ‘BB+’ respectively. The Outlook on the IDRs is Negative. A full list of rating actions is at the end of this commentary.

KEY RATING DRIVERS

IDBI’s SR and SRF are driving factors behind its IDR and primarily reflect Fitch’s expectation of a continued high probability of government support to the bank. It factors in IDBI’s size and systemic importance given its share in system assets and deposits (both at around 3.5% in FY12) and history of support extended during its transition from a legacy development finance institution (DFI). Regular capital injections from the government, which totalled around INR65bn (including INR3.8bn from Life Insurance Corporation of India in FY11) were also made in the last three years, as was the conversion of its Tier 1 bonds into common equity in FY12. The negative outlook on IDBI’s IDR mirrors that of the sovereign. >> Read More

• Reliance’s decision to invest more than US$30 billion in its existing core businesses over the next three years provides clarity regarding the company’s use of its significant cash balances.
• We believe the investment will strengthen the India-based energy and petrochemical company’s competitive position and underpin its profitability.
• We are raising our long-term corporate credit rating on Reliance to ‘BBB+’ from ‘BBB’. We are also raising our long-term issue ratings on the company’s senior unsecured notes and the notes issued by Reliance Holding USA Inc. that Reliance guarantees.
• The negative outlook on Reliance reflects the negative rating outlook on India. >> Read More

Expressing surprise over Standard & Poor’s threat to downgrade India’s credit rating, industry bodies have termed the global agency’s affirming its negative outlook on the country as unfortunate and harsh.

Standard & Poor’s (S&P) has warned that it may downgrade India’s sovereign rating to junk grade if the government fails to pursue reforms and check deterioration in fiscal and CAD.

“S&P’s warning of downgrading India to junk status has come as a surprise. At this juncture when signs of improvement are on the horizon, there is a high likeliness that the problems would soon be tackled,” industry chamber Ficci said.

It said the set of macro data released recently gives clear indications of return in buoyancy in the economy. >> Read More

Fitch Ratings has affirmed Japan’s Long-term foreign and local currency Issuer Default Ratings (IDRs) at ‘A+’ with a Negative Outlook. The Short-term IDR has been affirmed at ‘F1+’. The Country Ceiling has been affirmed at ‘AA+’.

The affirmation of Japan’s sovereign ratings in part reflects the greater commitment of the Bank of Japan and government to bring to an end two decades of economic stagnation and deflation. If successful and underpinned by structural reform to raise potential growth along with a credible medium-term deficit reduction plan, Japan’s adverse public debt dynamics could be corrected. The Negative Outlook reflects the uncertainty over the success of these efforts to shift the economy onto a more positive real and nominal growth path as well as the absence of more detailed reform and fiscal consolidation programme.

KEY RATING DRIVERS

The affirmation of the ratings with Negative Outlooks reflects the following key factors: >> Read More

Obviously with Buffett a major shareholder of Moody’s, the only place where a downgrade of Berkshire could come from was S&P. Moments ago, the rating agency that dared to downgrade the US for which it is being targeted by Eric Holder’s Department of “Justice”, did just that.

On New Criteria, Berkshire Hathaway Inc. Downgraded To ‘AA’, Core Ins. Subs Affirmed At ‘AA+’, Senior Debt Rated ‘AA’

Overview

• Under our revised group methodology criteria, we are lowering our counterparty credit rating on BRK to ‘AA’ from ‘AA+’. At the same time, we are affirming our ‘AA+’ counterparty credit and financial strength ratings on BRK’s core operating insurance companies.
• The ratings reflect our view of the group’s excellent business risk profile and very strong financial risk profile based on an extremely strong competitive position and very strong capital and earnings.
• The negative outlook reflects the U.S. sovereign ratings cap and our view that the group’s capital adequacy per our capital adequacy model could deteriorate relative to its risk profile.

Rating Action

On May 16, 2013, Standard & Poor’s Ratings Services lowered its counterparty  credit rating on Berkshire Hathaway Inc. (NYSE:BRK; AA/Negative/A-1+) by one  notch to ‘AA’ from ‘AA+’ and affirmed its ‘AA+’ insurance financial strength  ratings on BRK’s core subsidiaries following release of our revised Insurers  Rating and Group Rating Methodology, released on May 7, 2013. The outlook on all ratings is negative. At the same time, we assigned our ‘AA’ senior debt rating to Berkshire Hathaway Finance Corp.’s (BHFC) $1.0 billion senior 
unsecured notes. BHFC has issued the notes in two tranches: $500 million 1.3% senior unsecured notes due May 15, 2018, and $500 million 4.3% senior unsecured notes due May 15, 2043. The company used the proceeds of this issue to repay $1.0 billion of senior notes maturing on May 15, 2013. >> Read More

Tony Saliba

“How do you lose money? It is either bad day trading or a losing position. If it’s a bad position that is the problem, then you should just get out of it.”

“Clear thinking, ability to stay focused, and extreme discipline. Discipline is number one: Take a theory and stick with it. But you also have to be open-minded enough to switch tracks if you feel that your theory has been proven wrong. You have to be able to say, “My method worked for this type of market, but we are not in that type of market anymore.”

“Until recently, I set goals on a monetary level. First, I wanted to become a millionaire before I was thirty. I did it before I was twenty-five. Then I decided I wanted to make so much a year, and I did that. Originally, the goals were all numbers, but the numbers are’t so important anymore. Now, I want to do some things that are not only profitable, but will also be fun.”

Dr Van K. Tharp

“The composite profile of a losing trader would be someone who is highly stressed and has little protection from stress, has a negative outlook on life and expects the worst, has a lot of conflict in his/her personality, and blames others when things go wrong. Such a person would not have a set of rules to guide their behaviour and would be more likely to be a crowd follower. In addition, losing traders tend to be disorganized and impatient. Thet want action now. Most losing traders are not as bad as the composite profile suggest. They just have part of the losing profile.” >> Read More

Fitch Ratings has downgraded the United Kingdom’s Long-term foreign and local currency Issuer Default Ratings (IDR) to ‘AA+’ from ‘AAA’. The Outlook is Stable. At the same time, the agency has affirmed the UK’s Short-term foreign currency rating at ‘F1+’ and the Country Ceiling at ‘AAA’.

The rating actions follow the conclusion of the review of the UK’s sovereign ratings initiated on 22 March and resolve the Rating Watch Negative. The previous Negative Outlook on the UK’s sovereign ratings had been in place since 14 March 2012.

KEY RATING DRIVERS
The downgrade of the UK’s sovereign ratings primarily reflects a weaker economic and fiscal outlook and hence the upward revision to Fitch’s medium-term projections for UK budget deficits and government debt. Despite the loss of its ‘AAA’ status, the UK’s extremely strong credit profile is reflected in its ‘AA+’ rating and the Stable Outlook.

- Fitch now forecasts that general government gross debt (GGGD) will peak at 101% of GDP in 2015-16 (equivalent to 86% of GDP for public sector net debt, PSND) and will only gradually decline from 2017-18. This compares with Fitch’s previous projection for GGGD peaking at 97% and declining from 2016-17 and the ‘AAA’ median of around 50%. >> Read More

Though it may seem a little like stating the obvious to many, Moody’s comments:

 

 

While the risk of a euro exit by Cyprus is substantial… …following the economic dislocation that will be caused by the restructuring of the island’s two largest banks and the imposition of capital controls in the country, it is possible that the risk of euro exit will increase further.

And so while the talking heads discuss Cyprus as a unique situation and too small to care about, it seems the reality of the last two weeks has actually raised their chance of Euro exit as opposed to bailed them into the Euro.

Moody’s lowers Cyprus’s country ceilings to Caa2  >> Read More

• In our opinion, recent changes to the functioning of certain oversight institutions may further undermine Hungary’s institutional effectiveness.
• We are revising our outlook on our ‘BB’ long-term sovereign credit rating on Hungary to negative from stable and affirming the ‘BB/B’ long- and short-term sovereign ratings on Hungary.
• The negative outlook indicates the potential for a downgrade if a deterioration of Hungary’s policy framework weakens confidence and medium-term economic growth prospects, or significantly raises financing costs and leaves Hungary exposed to diminished capital inflows.
• We are also revising to negative from stable our outlooks on the ‘BB’ long-term issuer credit ratings on the National Bank of Hungary. >> Read More