The large-scale capital raisings by Australian companies across all sectors since the start of the global financial crisis have saved the domestic economy from falling into a recession and supports a modest recovery during the 2010 financial year, according to Fitch Ratings.
"Capital raisings have saved corporate Australia's bacon," Fitch Ratings corporate group director Maurice O'Connell said yesterday at the company's Australia Corporate Conference 2009 in Sydney.
"Without it there would have been a lot more financial stress."
Although the corporate sector continues to face challenges from low domestic growth, rising interest rates and the possible stalling of a global economic recovery, the ratings agency expects a modest recovery in 2010 on the back of these raisings.
O'Connell based his comments on a survey of the Australian corporate sector over the period from 1992 to 2009.
The ratings agency looked at leverage, interest and cash flow ratios of 2675 listed companies in Australia.
The survey showed the impact of the crisis on Australian companies was also softened by the resources boom, which resulted in a strong materials sector.
"What we've got now is a financial sector that is still showing signs of stress and a material sector that is providing a total opposite reaction - it has shown and continues to show great strength," O'Connell said.
"This has underpinned much of the strength of corporate Australia," he said.
