Low economic growth, weak consumer and business confidence, and foreign exchange volatility will keep the overall outlook for Middle Eastern nonfinancial corporates and their Turkish and South African counterparts in 2017 negative, according to the latest report by Moody's Investors Service.

However, some investment grade rated companies such as those in Turkey will remain resilient, stated the ratings agency in its repoprt titled "Non-Financial Corporates -- Middle East, Turkey and South Africa: 2017 Outlook - Negative on Weak Growth and Challenging Operating Conditions".

This is part of a series of 2017 Credit Outlooks that provide insight into next year's credit conditions across all sectors.

"Our overall negative outlook for Turkish, Middle Eastern and South African companies in 2017 is driven by weak consumer and investor confidence, continuing currency volatility and varying geopolitical risks," remarked Rehan Akbar, a Moody's assistant vice president - analyst and author of the report.

However, some corporates including Turkish investment grade rated names remain relatively resilient to domestic economic slowdown by virtue of their market leadership positions, strong balance sheets, healthy liquidity and manageable FX exposure, he added.

According to Moody's, the GCC companies, particularly those in oil and gas and oilfield services, are being hurt by low oil prices, which are limiting growth prospects in the region and reducing companies' financial buffers.

Liquidity is also tightening, but should remain manageable for large corporates, it stated.

In South Africa, companies will be hit by the low growth environment with Moody's GDP growth expectations of 1.1 per cent for 2017, political uncertainty, weak consumer consumption and low capital investment spend, as well as rand volatility, according to the report.

However, rated companies generally are geographically diversified so their exposure is not limited to South Africa, and have healthy balance sheets with manageable liquidity positions to weather the macro environment, it added.-TradeArabia News Service