Fitch: EMEA TMT Gradually Improving; Commodities under Pressure
OREANDA-NEWS. Fitch Ratings says in its latest EMEA Corporate View Dashboard that the natural resources and oil sectors experienced an uptick in leverage and the number of Negative Outlooks as companies continue to suffer from negative pricing trends, weak Chinese demand, and credit metric deterioration. The number of Positive Outlooks increased in the telecoms sector, with notable improvements in Q116 from BT Group plc and Nokia Corporation.
Our quarterly forecasts show a slight improvement in expected median funds from operations (FFO)-adjusted net leverage and FFO fixed charge cover ratios, driven by a gradual economic recovery across Europe. FFO have been slightly boosted by improved cash generated from operations across developed Europe as EMEA companies focus on cost-cutting and boosting revenue growth.
Key themes to watch in 2016 include continuing M&A as dim growth prospects force European corporates to increasingly turn to M&A to achieve cost savings from consolidation or, to a lesser extent, to acquire growth.
The Dashboard provides a quarterly snapshot of EMEA corporate market conditions, including bond issuance, spreads and rating migrations. The report also provides a summary of quarterly changes in sector forecasts and rating Outlooks.