Friday, September 16, 2011

AP consumer goods companies performed well in 1H2011, says S&P

KUALA LUMPUR: Asia-Pacific consumer goods companies have performed well in the first half of 2011, and are likely to maintain their credit quality in the second half of the year, said Standard & Poor's Ratings Services (S & P).

In a report Friday, Sept 16, S&P said most consumer goods companies it rated in the Asia-Pacific continued to demonstrate their ability to generate sustainable cash flow and maintain adequate liquidity, which should protect their credit quality amid difficult operating conditions, which include high raw material costs and intense competition.

S & P's credit analyst Amano Machiko said competition would increase because many companies sought to raise their brand recognition and widen their market shares in emerging countries, adding that mergers and acquisitions (M&As) may continue.

"Consumer confidence across the Asia-Pacific continues to differ from country to country, depending on demographic issues and issues specific to industry subsectors,' said Machiko.

The report said difficult operating conditions for consumer goods companies at the lower end of the rating spectrum and increased spending on acquisitions and investments at the higher end were likely to restrict upside rating changes toward the end of this year.

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