S & P retains BBB – Rating for India but downgrades Outlook to Negative…I’m finding it difficult to counter as it echoes ground realities !

S & P retains BBB – Rating for India but downgrades Outlook to Negative from Stable…indicating a possible down rating in the future….BBB- remains the lowest Investment grade Rating,just one notch above BB+ which is the highest Speculative Grade Rating….  I’m finding it difficult to counter as it echoes ground realities of high Current Account and Fiscal Deficits !

Sensex dropped a percent on this news earlier today and has recovered  a bit  to 17150 levels as I blog this just after 3 pm

Nearly Two years ago in May 2010 I had blogged how amusing it was that S & P continued to rate USA  as AAA…India at the time had the same rating of BBB-,as it does now, but with a stable outlook

S & P’s Sovereign Rating of USA remains at Top ‘AAA’….Amusing!

Friday, May 21st, 2010

Here is a selected and grouped compilation of the latest Standard & Poor’s Sovereign Ratings sourced from www.standardandpoors.com…what is interesting is the relatively high ratings to Ireland,Italy and Spain among the PIIGS Nations in context of the recessionary ,high debts and deficits ,low liquidity and survival issues being currently faced in the EuroZone

Selected Countries S & P Sovereign Ratings as on April 25,2012

 

Country

Local Currency Rating

Foreign Currency Rating

T & C Assessment

 

India ~ Unsolicited

BBB-

BBB-

BBB+

 

BRIC Nations

Brazil

A-

BBB

A-

Russia

BBB+

BBB

BBB

India

BBB-

BBB-

BBB+

China

AA-

AA-

AA-

 

PIIGS Nations ~ Europe

Portugal

BB

BB

AAA

Italy

BBB+

BBB+

AAA

Ireland

BBB+

BBB+

AAA

Greece

SD ~ Selective Default

SD ~ Selective Default

AAA

Spain

A

A

AAA

 

Developed Nations

USA ~ Unsolicited

AA+

AA+

AAA

UK ~ Unsolicited

AAA

AAA

AAA

Germany ~ Unsolicited

AAA

AAA

AAA

France ~ Unsolicited

AA+

AA+

AAA

Japan ~ Unsolicited

AA-

AA-

AAA

Australia ~ Unsolicited

AAA

AAA

AAA

New Zealand

AA+

AA

AAA

Canada

AAA

AAA

AAA

Netherlands ~ Unsolicited

AAA

AAA

AAA

Switzerland ~ Unsolicited

AAA

AAA

AAA

 

South & Central America

Brazil

A-

BBB

A-

Mexico

A-

BBB

A

Argentina ~ Unsolicited

B

B

B

Chile

AA

A+

AA

Peru

BBB+

BBB

A-

Colombia

BBB+

BBB-

BBB+

 

Asia

India

BBB-

BBB-

BBB+

China

AA-

AA-

AA-

Japan

AA-

AA-

AAA

Indonesia

BB+

BB+

BBB-

Thailand

A-

BBB+

A

Malaysia

A

A-

A+

South Korea

A+

A

AA-

Singapore ~ Unsolicited

AAA

AAA

AAA

Taiwan ~ Unsolicited

AA-

AA-

AA+

Phillipines

BB+

BB

BB+

Pakistan

B-

B-

B-

Sri Lanka

B+

B+

B+

Bangladesh

BB-

BB-

BB-

Turkey

BBB-

BB

BBB-

 

Africa

Egypt

B

B

B

South Africa

A

BBB+

A

Nigeria

B+

B+

B+

Kenya

B+

B+

BB-

Uganda

B+

B+

BB-

Given such Macro Negatives can the Sensex hold above 17000 in the short term with even FII Inflows reversing as Government seeks to clarify on tax with a retrospective effect  but instead creates a Fear psychosis,anger,anxiety and frustration with GAAR Measures and it’s targeting Vodaphone ?…In the Jan-March 2012 quarter the FIIs had pumped in a record Rs 41000 crs moving the Sensex from December 2011 Close levels of 15500 to Highs of 18500,only to revert back towards 17000 now

Furthermore,with the Rupee seeking to yet again depreciate further beyond Rs 53 to the US $ and thus keeping the pressure on Inflation and Interest rates, I for one,am finding it difficult to get excited or even remain spirited about macro trends in the  markets in the short term…I remain Hopeful and selective though !

Cheers !