LAST week Standard & Poor’s Ratings Services affirmed its A- long-term issuer credit ratings on Sarawak.
In a report from Reuters, Standard & Poor’s said the outlook for the State is stable.
What a great year-end gift for Sarawak. Prior to this Moody’s said it could possibly revise the State’s rating upwards. The Auditor-General gave the State’s financial management a clean bill of health for the ninth consecutive year.
The State also has an RM79 million surplus budget for next year. Such a rarity in times when nations across the globe have budgets that are well into the red!
Standard & Poor’s credit analyst Yee Farn Phua said the agency “affirmed the ratings on Sarawak to reflect the state’s strong operating balance, robust liquid reserves, and its supportive relationship with the federal government of Malaysia”.
Sarawak’s four consecutive years of surpluses after capital accounts was also taken into consideration.
The agency said a key supporting factor for Sarawak is the state’s extremely strong liquidity position.
“Its large holdings of free cash and liquid assets provide ample coverage for debt servicing, and comfortably offer Sarawak the capacity to face potential fiscal shocks.
“The robust liquidity position also acts as a buffer against the state’s large un-hedged U.S. dollar debts, and mitigates short-term exposure risks, in our view.”
Now in August, Standard & Poor’s downgraded the United States’ triple-A credit. It downgraded four of Hungary’s banks. It warned of upcoming Dubai debt. Basically the agency has been downgrading or been unimpressed with the financial performance of nations across the globe this year.
But of Sarawak Phua said: “The stable outlook reflects our expectation that the state will continue its strong budgetary performance and maintain its robust liquidity position over the next two to three years.”
Sound financial management and an economy that has continued to grow in the midst of a global economic meltdown. Well done Sarawak. Well done!