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28
November 2016
The robust economic growth coupled with
low oil prices will make India's automobile asset based securities (ABS) or
vehicle loans stable, said Moody's Investors Service on Monday.
According to Moody's India's
securitisation markets will perform in a stable manner with good credit quality
across most asset classes. The Total
Investment & Insurance Solutions
"In India, robust growth and low
oil prices will underpin stable auto ABS performance, despite the economic
disruption from the country's demonetisation," said Yian Ning Loh, a
Moody's Senior Vice President. The
Total Investment & Insurance Solutions
Moody's conclusions are contained in its
just-released 2017 outlook for the sector, titled "Structured Finance --
India, Korea and Singapore: 2017 Outlook -- Performance Stable, Credit Quality
Good Across Most Asset Classes".
The Total Investment & Insurance Solutions
Moody's expects the performance of
Indian commercial vehicle (CV) loans backing auto ABS transactions to remain
stable. The Total Investment &
Insurance Solutions
Delinquency rates will increase somewhat
in the very short term owing to the Indian government's decision to withdraw Rs
500 and Rs 1,000 notes.
However, delinquencies should return to
their current levels over the course of 2017, owing to robust economic growth
and low oil prices. The Total
Investment & Insurance Solutions
Moody's also expects new Indian auto ABS
issued in 2017 to have good credit characteristics.
Residential mortgage performance should
also remain strong in 2017, with low delinquencies reflecting low interest
rates, steady house prices and stable prepayment rates.The Total Investment & Insurance Solutions
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