Moody‘s Investors Service says that its Asian Liquidity Stress Indicator (LSI) has reached its second weakest level on record, registering 34.9% in November 2018 from 33.3% in October 2018.

The Asian LSI measures the percentage of high-yield companies with Moody‘s weakest speculative-grade liquidity score of SGL-4 as a proportion of high-yield corporate family ratings. The indicator increases when speculative-grade liquidity deteriorates.

The reading in November was well above the trailing 12-month average of 30.0%. While, the primary driver for the weak liquidity trend in 2018 is the increasing number of companies that rely heavily on uncommitted, short-term facilities from relationship banks.