Moody's: Stable view for Asia Pacific retailers

Moody's Investors Service said it sees a stable outlook for Asia Pacific's retailing and consumer-product sectors over the next 12 to 18 months despite rising economic uncertainty in the region and worldwide.

The slowing global growth poses few negative rating implications for Asian issuers because they sell primarily into domestic and regional consumer markets that remain strong relative to those in the United States and Europe, Moody's said.

However, Australia's economy may grow more slowly than originally forecast due to a variety of factors, which may have longer-term implications for some of its issuers, the agency added.

Most of the rated companies derive at least some of their earnings from non-discretionary food and beverage items, which provide a measure of protection in a weakening economy, Moody's said.

But consumers may switch to lower-priced products and away from premium beverages that have driven substantial margin growth in recent years, the agency added.

However, continued high fuel, packaging, and input costs - from barley for brewing beer to polyethylene terephthalate for soft-drink bottles - are squeezing margins for issuers unable to pass on higher costs to retailers, who generally enjoy greater pricing power, Moody's said.

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