Fitch revises Macao view to negative

Fitch Ratings said it revised the rating outlook on Macao to negative from stable and affirmed the long-term foreign-currency issuer default rating at AA.

“The negative outlook signals Fitch’s view that Macao’s large and rising economic, financial, and socio-political linkages with mainland China are consistent with a gradual convergence of their respective sovereign ratings. This was also among the drivers of Fitch’s downgrade of Hong Kong’s long-term foreign-currency IDR in September,” said Fitch in a press release.

Fitches said its AA rating on Macao is two notches above that of mainland China and rests on the assumption that the territory’s governance, rule of law, economic policy framework and business and regulatory environments remain distinct from that of the mainland.

“These assumptions are now evolving as China’s Special Administrative Regions (SARs) become more closely integrated into the national governance system, which has been accelerated by events in Hong Kong, as well as via policy initiatives such as the Greater Bay Area, which seek to enhance long-term regional growth opportunities by more closely integrating the economies of southern China,” Fitch said.

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