Published on 27 Dec 2021.
RAM Ratings has released its updated State Implicit Strength (SIS) ratings and assessments of Malaysia’s 13 states. The SIS assessments reflect RAM’s relative ranking of the general credit and fiscal strength of individual states. In the rating of a state-related entity, we rely on the SIS rating to assess the state government’s capacity to provide support to the entity.
The SIS takes into account states’ financial position and outlook, macroeconomic conditions and institutional factors that underpin credit strength. The COVID-19 pandemic and various political developments have affected some of these indicators in the past two years but the relative rank of the individual states’ SIS remains largely unchanged since our initial assessment in 2018.
The states at the top quartile of the ranking, which include Johor, Penang, Selangor and Sarawak, have generally outperformed their peers in terms of economic or fiscal performance. On the other hand, higher debt levels, continued reliance on federal government transfers and weaker growth trends constrain the SIS ratings of other states.
View RAM’s State Implicit Strength Reports Brochure here.
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Established in 1990, RAM Ratings is a leading credit rating agency registered under the Securities Commission’s Guidelines on Registration of Credit Rating Agencies, 2011. In addition to the provision of credit ratings for corporate bonds and sukuk and their issuers, RAM Ratings also provides research and publications on Islamic finance, fixed income and macro-economic and industry analysis as well as data analytics relating to credit risk, counterparty assessments and other related domains.
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