(Yicai Global) Feb. 26 -- The outbreak of the Covid-19 coronavirus will not influence the ratings of firms with connections to the Wuhan municipal government, The Paper cited US-based Fitch Ratings as saying.
The epidemic may impact Wuhan's economy and its government revenue this year, but the impact of the outbreak will depend on its severity and length, said Gao Junjie, head of Asia Pacific at Fitch's international public finance department. New York-based Fitch expects Wuhan's economic growth will slow this quarter but rebound in the second half if the epidemic is controlled.
Covid-19 will also not affect Wuhan Urban Construction Investment and Development Group's offshore re-financing plans, Fitch predicted, adding that the expiration value of re-financing onshore will be similar to the past year.
Fitch also believes that China's policies on urban investment will focus mostly on controlling growth and transferring inventory, added Zhao Yuqing, associate director of Asia Pacific in the same department as Gao. The policies aim to control general debt and guide investments toward infrastructure, which can promote organic growth of general budget revenues long term in transport, public utilities and services.
Xu Haowei, a senior director at the department, expects to see more sector integration this year and believes this will help governments monitor debts at local state-owned companies. It will also encourage the integration of local resources and enhance firms' ability to bargain, lowering the cost of fundraising, he added.
Editor: James Boynton