Tris Rating, a Thai credit rating agency, warns that property and leasing businesses should be strictly monitored in the second half based on decreasing demand, after 20 companies were downgraded in the first six months.

President Sakda Pongcharoenyong said the real estate and leasing industries have a gloomy outlook in the second half as declining demand may affect their operating results.

In the first six months of this year, Tris issued credit ratings for 220 companies, of which 10% had a negative outlook.

Roughly 20 companies were downgraded, mainly small ones.

"Often more downgrades are seen in the first half. These companies were affected by the global economic slowdown, causing exports to decrease, while energy costs increased as a result of the war in Ukraine. Some companies have postponed debt repayments as business has not yet recovered," said Mr Sakda.

"If a company asks Tris to do credit ratings, we will especially look at the area of corporate governance, particularly in the case of mergers and acquisitions. Before a downgrade, we will issue a negative outlook first to signal the market."

Late last month Suchada Pantu, senior executive vice-president of Tris, said the agency had downgraded several corporate bond issuers this year, attributed to weakened financial conditions as economic growth slows.

The ratings agency anticipates a potential economic rebound in the second half this year, driven by fiscal 2024 budget disbursements and government stimulus packages.

According to Tris data, 14 corporate bond issuers were rated with a negative outlook at the beginning of the year, compared with only four having a positive outlook, while the majority remained stable.

In a related development, the Thai Bond Market Association (ThaiBMA) said 443 billion baht worth of corporate bonds are due for redemption in the second half, including 221 billion baht due in the third quarter.

ThaiBMA expects roughly 1 trillion baht worth of corporate bonds to be issued this year, including from large companies such as 25 billion baht by Siam Cement, 15 billion by PTT Plc, 12 billion by Gulf Energy Development, 6 billion by Banpu, and 5.5 billion by Energy Absolute, said executive vice-president Ariya Tiranaprakit.