Dagong gets first nation client
Updated: 2011-11-09 07:55
By Wei Tian (China Daily)
BEIJING - The Chinese rating agency Dagong Global Credit Rating Co has secured its first sovereign customer, the Republic of Belarus. The Eastern European country is hoping that the rating provided by Dagong will lure more Chinese investors.
A contract to entrust the agency with a thorough sovereign credit rating service for the country was signed in Beijing on Tuesday, although the size of the contract remains confidential.
The rating will be the first to be conducted by a non-Western rating agency, and signals another step in Dagong's move toward the global ratings market.
The agency's report will be completed within 45 working days and further updates will be issued over time.
"We hope the rating result will better facilitate an exchange of investment between the two countries, and better reflect the economic climate and developments in Belarus for investors from China and globally," said Viktor Burya, the ambassador to China.
Earlier this year, the country's sovereign credit rating was downgraded by two major agencies, Moody's Investors Service and Standard & Poor's (S&P), citing a reduction in the amount of foreign aid the country received and devaluation of its currency as reasons for the move.
"We're hoping for a different result from Dagong, but we don't want to push anyone for any results," said Kiryl Rudy, counselor of Finance and Investment at the Belarusian embassy in China.
Rudy said Dagong's evaluation may emphasize the country's advantages and provide potential investors with a clearer picture of its finances. Dagong will also be in a position to point out any disadvantages and help the country to improve its investment climate.
To heighten its international profile, Dagong has now voluntarily compiled sovereign credit ratings for 68 countries. Its results are very different from those of the "Big Three", Moody's, S&P, and Fitch Ratings.
Jin Yongshou, Dagong's managing vice-president, said the methodology and criteria used to assess Belarus will be same as those employed in its voluntary ratings. However, in addition to information freely available, the agency will also have access to accurate and detailed data provided by the client.
The move may set an example for neighboring countries such as Ukraine, Russia and the entire European continent, said Rudy.
"We're also in negotiations with several other countries about requests for ratings, including some major economies," said Lu Heng, general manager of Dagong's international department.
The agency is also applying for a license from the European Securities and Markets Authority, which would allow Dagong to establish an office in Europe, Lu said.
"More contracts will pour in once we have the permit," she said.