Fitch: Asia-Pacific utilities stable

Fitch Ratings said it said the 2009 credit outlook for the Asia-Pacific power and utilities sector is broadly stable, although some countries and companies face negative credit trends.

The economic slowdown may ease the capital expenditure burden in the region's fastest growing economies, Fitch said.

Asia-Pacific utility companies are generally well-placed to access funds during the credit crunch because of the relative stability of their cash flows and, in many cases, close links to governments, the agency added.

Some factors are generally common across all countries: the businesses are capital intensive; capital expenditure is rising; there is often a correlation between local fuel costs and international fuel costs; and demand is related to economic growth, Fitch said.

However, factors such as the level of government ownership/intervention, the difference in exposure to competition or the forms of tariff regulation are so different across the region that the power and utilities sector within each country tends to have its own credit momentum, the agency said.

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