Moody’s downgrades Nissan’s credit rating, citing weak sales in US

Moody’s cut its rating of Nissan’s credit to ‘A3’ from ‘A2,’ adding that the outlook was negative. (AFP)
Updated 24 May 2019

Moody’s downgrades Nissan’s credit rating, citing weak sales in US

  • Nissan reported a 45 percent plunge in annual operating profit in the year ending March
  • Moody’s cut its rating of Nissan’s credit to ‘A3’ from ‘A2’

TOKYO: Moody’s cut its rating on Nissan by one notch on Friday, citing weak sales in the United States and casting a shadow on the Japanese automaker’s move to improve its business following a decline in its annual profit.
Nissan — hit by former Chairman Carlos Ghosn’s arrest last year and troubles at its North American business — reported a 45 percent plunge in annual operating profit in the year ending March, and forecast a 28 percent drop in profit this fiscal year.
Moody’s cut its rating of Nissan’s credit to “A3” from “A2,” adding that the outlook was negative.
“The downgrade reflects the continuing slide in Nissan’s profitability, driven by weak sales in the US, its largest market,” Moody’s Vice President Motoki Yanase said in a statement.
While Nissan’s new strategy focuses on margin over unit sales growth and refreshing old models to improve its brand value, the ratings agency expects the overhaul will take “several years.”
“The negative outlook on Nissan reflects execution risk as Nissan implements its business strategies globally, reforms its corporate governance and stabilizes its alliance with Renault,” it said.
France’s Renault is the top shareholder in Nissan.


Finance shake-up with Saudi derivatives market to launch in Q3

Updated 10 July 2020

Finance shake-up with Saudi derivatives market to launch in Q3

  • Launch of futures contracts to be made before the end of the third quarter of this year

RIYADH: Saudi Arabia’s Capital Market Authority (CMA) plans to launch a derivatives exchange in the latest move to modernize the Kingdom’s financial landscape.

An announcement about the launch of futures contracts will be made before the end of the third quarter of this year, Asharq Al-Awsat newspaper reported, citing CMA Chairman Mohammed El-Kuwaiz.

“We are in the phase of developing the derivatives market with intensive work on the options contracts and the futures contracts” he said.

He was speaking in an online discussion panel organized by the General Authority for Small and Medium Enterprises (Monshaat).

The markets chief said that the impact of the coronavirus on the market would be more visible in second quarter earnings and that the regulator was working on easing some of its procedures in response.

Tadawul is planning to launch additional derivative products gradually as part of its strategy to diversify its product offering and provide more investment opportunities for global investors.

Separately, Tadawul CEO Khalid Al-Hussan disclosed that the bourse has received a number of requests for new share offerings that are currently being reviewed. He said three companies had been approved to list on the parallel market known as “Nomu.”

 

 

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Derivative

A derivative is a financial instrument that acts as contract between two or more parties whose value is based on an agreed-upon underlying asset such as a stock or a bond.