Asian corporates’ eurozone exposure likely to be manageable: Fitch

The impact of the eurozone debt crisis on Asian companies is likely to be kept under control, due to their relatively small reliance on European demand and their improved financial capacity, global credit appraiser Fitch Ratings said Thursday.

"The economic fallout from the current eurozone crisis should be manageable for most Asian corporates, although certain sectors and geographies are more vulnerable than others," the credit ratings agency said in an e-mailed release.

The ratings agency said that Asian exporters may suffer from slowing European demand, but its impact is likely to be limited as a large number of companies rely more on demand within the region.

For instance, Fitch said Samsung Electronics Co. is less vulnerable, compared with its Japanese counterparts, since it is more focused on developing markets rather than the European market.

The ratings agency said that automakers may undergo some demand impact from the eurozone risk, but added that Korean automakers were suffering less from a global demand slowdown as they have a relatively balanced market portfolio.

"Japanese automakers are more exposed to a further slowdown in the U.S. than to Europe. The effect on Korean manufacturers will be reduced by product substitution in their favor in both regions, given the quality and relative cost of their products," according to the release.

Meanwhile, Fitch said that Asian corporates' improved access to funding and lower leverage, compared with those during the 2008 global financial crisis, is also set to help them brace against eurozone uncertainties.

Earlier this month, the ratings agency had upgraded its rating outlook for Korea's sovereign debt to "positive" from "stable," citing the nation's strong external liquidity, improved fiscal health and fast economic recovery. (Yonhap)