Singapore secures second-least risky sovereign credit ranking

SINGAPORE has emerged as the second-least risky country after Norway in an international index that ranked the sovereign credit of 50 countries.

However, it was the only South-east Asian economy to make it to the top 10 for the quarter ended June 30, according to the report released on Monday.

Among its neighbours in the region, Malaysia notched up the biggest deterioration out of the 50 countries in its score, dropping one rung to 19th place, while Indonesia fell two notches to 33rd.

Malaysia's slide came as credit rating agency Moody's cut its estimate of the country's foreign exchange and gold reserves from 37 per cent to 30 per cent of its gross domestic product (GDP), said asset manager BlackRock, which conducted the rankings. This raised Malaysia's estimated net debt levels and dampened its "external finance position" score, BlackRock said.

Indonesia's decline was due to a drop in its "willingness to pay" score and "fiscal space" score. BlackRock noted that the term structure of Indonesia's debt had worsened, with a rise in the portion set to mature in the next two years.

At the bottom of the barrel was Greece.

Singapore was added to the BlackRock Sovereign Risk Index in 2012, and had also started off in second place behind Norway.

The index ranks countries based on their weighted scores in four categories: fiscal space (40 per cent), which includes metrics such as debt to GDP; willingness to pay (30 per cent), which gauges a government's perceived effectiveness and stability; external finance position (20 per cent), which includes exposure to foreign currency debt; and financial sector health (10 per cent) which measures the strength of the banking system.