Asia-Pacific sectors will face diverging credit prospects as concentrated growth drivers widen the gap between winners and losers under the exposure to artificial intelligence (AI), S&P Global Ratings said on Tuesday.

The issuers that are more resilient tend to have supply-chain flexibility, pricing power, favorable financing, and exposure to artificial intelligence (AI) demand, the rating agency said in a note.

“AI-related investment and strong exports are supporting the technology and electronics sectors,” said Eunice Tan, Head of Credit Research, Asia-Pacific at S&P Global Ratings.

“Ample liquidity and tight spreads currently support financing, even as rising benchmark yields increase borrowing costs,” he noted. “Upcoming debt maturities appear manageable due to the dominance of higher-rated debt.”

But risks abound, and vulnerabilities are emerging, according to S&P.

Prolonged energy supply disruptions pose a threat to manufacturing, agriculture, and transportation sectors.

Global stresses may weaken sentiment and tighten financing for weaker borrowers, while emerging Asia remains exposed to capital rotation as investors seek stronger risk-adjusted returns.

If multiple risks occur at once, they could amplify credit stress and widen divergence among issuers, said S&P.

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