Group CEO of CIMB sees China's Dagong Global Credit Rating Co Ltd as being best-placed to represent the region's voice in global credit ratings
Read more: Rating milestone http://www.btimes.com.my/articles/ating/Article/#ixzz1SuBTt41e
Beijing: CIMB Group Holdings Bhd's chief, who has long advocated the need for Asia to have at least one rating agency that can represent the region's voice in global credit ratings, sees China's Dagong Global Credit Rating Co Ltd as being best-placed to take on that role. The group threw its support for Dagong by becoming the first corporation in Asean to be rated by the private, independent rating agency. Dagong, set up in 1994, is the largest and the only rating agency in China that is not partly-owned by or affiliated with any Western rating agencies such as Standard and Poor's (SandP), Fitch Ratings and Moody's. "To us, Dagong has the best foundations to be the Asian voice in global ratings," Datuk Seri Nazir Razak, group chief executive officer of CIMB Group, said at the launch of its rating report here yesterday. The group's commercial banking arm, CIMB Bank Bhd, was assigned a long-term local currency issuer rating of "AA", and a long-term foreign currency rating of "AA-". Both ratings carried a positive outlook. Nazir has, since 2009, been speaking out on the need for there to be at least one Asian-owned-and-managed rating agency to balance the dominance of Western institutions, whose frameworks he described as being "unfair", and to reflect the rise of Asian economic power. "Despite the recent wave of downgrades across the West, I find it difficult to understand how Spain (rated 'AA' by SandP) is still rated higher than China ('AA-'), and Ireland ('BBB+') higher than India ('BBB-'). "How is China, with over US$3 trillion (RM8.94 trillion) in foreign exchange reserves and only US$27 billion (RM80.5 billion) in foreign currency sovereign debt more likely to default than Spain which has US$13 billion (RM39 billion) in reserves and US$1 trillion (RM2.98 trillion) in debt?," Nazir highlighted in his speech at the launch. Ever since the recent global financial crisis, people have become less trusting of Western rating agencies and are now more eager to have objective rating information, he said. "I'm not saying don't get rated by SandP and the rest, but we do need to get an Asian voice out there," he remarked. Nazir later shared with Malaysian reporters that he had hoped that RAM Ratings would become the Asian voice in global ratings, but this will not happen now that the Malaysian rating agency has taken up the "wrong strategy" in looking to partner with SandP. SandP is currently in discussions to take up a stake in RAM. "RAM has very strong credentials, and I think it's giving up on those credentials by partnering with a Western agency. So now we're betting on Dagong," Nazir remarked. Dagong's chairman and president Guan Jianzhong said the agency has been been approached to provide rating services to an increasing number of international financial institutions (FI), mostly from Europe. Dagong gained international attention last year when it became the first non-Western rating agency to issue credit ratings for 50 countries. CIMB Bank is one of the first FIs it rated. Dagong's ratings on CIMB Bank are higher than that assigned by SandP, Moody's and Fitch as the Chinese agency placed relatively more weight on the growing prospects of the bank and its position and strength at home and in the region, Guan said. "Our inaugural rating by Dagong will prove an important milestone in strengthening economic and financial sector linkages between China and Malaysia. With this rating, regulators, fund managers and investors in China and beyond will have an Asian-alternative assessment of CIMB Bank's financial strength and credit standing," Nazir said. Asked about CIMB Group's plans for China, Nazir said it planned to convert a representative office in Shanghai into a branch so that it is better able to facilitate investment flows between China and Asean. CIMB Group's presence in China currently is through two representative offices in Shanghai and a 19.99 per cent stake in Bank of Yingkou, a Chinese mid-sized lender.
Read more: Rating milestone http://www.btimes.com.my/articles/ating/Article/#ixzz1SuBTt41e
Beijing: CIMB Group Holdings Bhd's chief, who has long advocated the need for Asia to have at least one rating agency that can represent the region's voice in global credit ratings, sees China's Dagong Global Credit Rating Co Ltd as being best-placed to take on that role. The group threw its support for Dagong by becoming the first corporation in Asean to be rated by the private, independent rating agency. Dagong, set up in 1994, is the largest and the only rating agency in China that is not partly-owned by or affiliated with any Western rating agencies such as Standard and Poor's (SandP), Fitch Ratings and Moody's. "To us, Dagong has the best foundations to be the Asian voice in global ratings," Datuk Seri Nazir Razak, group chief executive officer of CIMB Group, said at the launch of its rating report here yesterday. The group's commercial banking arm, CIMB Bank Bhd, was assigned a long-term local currency issuer rating of "AA", and a long-term foreign currency rating of "AA-". Both ratings carried a positive outlook. Nazir has, since 2009, been speaking out on the need for there to be at least one Asian-owned-and-managed rating agency to balance the dominance of Western institutions, whose frameworks he described as being "unfair", and to reflect the rise of Asian economic power. "Despite the recent wave of downgrades across the West, I find it difficult to understand how Spain (rated 'AA' by SandP) is still rated higher than China ('AA-'), and Ireland ('BBB+') higher than India ('BBB-'). "How is China, with over US$3 trillion (RM8.94 trillion) in foreign exchange reserves and only US$27 billion (RM80.5 billion) in foreign currency sovereign debt more likely to default than Spain which has US$13 billion (RM39 billion) in reserves and US$1 trillion (RM2.98 trillion) in debt?," Nazir highlighted in his speech at the launch. Ever since the recent global financial crisis, people have become less trusting of Western rating agencies and are now more eager to have objective rating information, he said. "I'm not saying don't get rated by SandP and the rest, but we do need to get an Asian voice out there," he remarked. Nazir later shared with Malaysian reporters that he had hoped that RAM Ratings would become the Asian voice in global ratings, but this will not happen now that the Malaysian rating agency has taken up the "wrong strategy" in looking to partner with SandP. SandP is currently in discussions to take up a stake in RAM. "RAM has very strong credentials, and I think it's giving up on those credentials by partnering with a Western agency. So now we're betting on Dagong," Nazir remarked. Dagong's chairman and president Guan Jianzhong said the agency has been been approached to provide rating services to an increasing number of international financial institutions (FI), mostly from Europe. Dagong gained international attention last year when it became the first non-Western rating agency to issue credit ratings for 50 countries. CIMB Bank is one of the first FIs it rated. Dagong's ratings on CIMB Bank are higher than that assigned by SandP, Moody's and Fitch as the Chinese agency placed relatively more weight on the growing prospects of the bank and its position and strength at home and in the region, Guan said. "Our inaugural rating by Dagong will prove an important milestone in strengthening economic and financial sector linkages between China and Malaysia. With this rating, regulators, fund managers and investors in China and beyond will have an Asian-alternative assessment of CIMB Bank's financial strength and credit standing," Nazir said. Asked about CIMB Group's plans for China, Nazir said it planned to convert a representative office in Shanghai into a branch so that it is better able to facilitate investment flows between China and Asean. CIMB Group's presence in China currently is through two representative offices in Shanghai and a 19.99 per cent stake in Bank of Yingkou, a Chinese mid-sized lender.
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