The CreditMapper is an analytical tool which provides guidance in assessing the creditworthiness of a company/entity and assistance for investment decisions. The CreditMapper generally requires less detailed knowledge on the part of the user, consistent with the information that is available and observable to the market, while accommodating qualitative input from the user. This allows the credit assessments to be produced in a shorter time and with considerably less effort. The CreditMapper, when augmented with fundamental credit analysis, offers a more complete/holistic approach for credit assessment. The model is not intended to substitute the fundamental credit rating analysis employed by the rating agencies, which are typically based on publicly available information as well as non-public information.
In addition to quantitative financial information, the CreditMapper also captures the user’s qualitative input on an entity’s management, its competitive position, and the risk inherent in its industry to produce scoring that ranges from CM-1 to CM-16. The user retains discretion on the weight that is to be applied to subjective information on an entity in the credit assessment. Different combinations of weights may be applied to quantitative and qualitative information to produce the final assessments. The CM scoring is an indication of an entity’s credit strength; derived from the various analysis applied by the CreditMapper.
| CM Scoring | Scoring Reference | Risk Profile |
|---|---|---|
| CM-1 |
1.00 | Extremely strong credit strength with minimal non-repayment risk |
| CM-2 | 1.25 | Very strong credit strength with exceptionally low non-repayment risk |
| CM-3 | 1.50 | Very strong credit strength with very low non-repayment risk |
| CM-4 | 1.75 | Very strong credit strength with low non-repayment risk |
| CM-5 | 2.00 | Strong credit strength with low non-repayment risk |
| CM-6 | 2.25 | Strong credit strength with moderate to low non-repayment risk |
| CM-7 | 2.50 | Strong credit strength with moderate non-repayment risk |
| CM-8 | 2.75 | Moderate credit strength with moderate non-repayment risk vulnerable to adverse market condition |
| CM-9 | 3.00 | Moderate credit strength with medium non-repayment risk vulnerable to adverse market condition |
| CM-10 | 3.25 | Moderate credit strength with medium to moderately high non-repayment risk |
| CM-11 | 3.50 | Weak credit strength with moderately high non-repayment risk |
| CM-12 | 3.75 | Weak credit strength with high non-repayment risk |
| CM-13 | 4.00 | Weak credit strength with very high non-repayment risk |
| CM-14 | 4.25 | Very Weak credit strength with moderately high non-repayment risk |
| CM-15 | 4.50 | Very Weak credit strength with potential to default |
| CM-16 | 4.75 | Very Weak credit strength with high potential to default |
The quantitative approach applies statistical methods including standard deviation, percentile and regression analysis on empirical data pool(s) to assess credit risk. This technical approach produces consistent and stable outputs omitting the human emotional element of the fundamental credit analysis. Under the CreditMapper, there are two sets of data pool: Bursa Malaysia universe and MARC universe for which the assessee will be benchmarked against. The users may adjust the data pool under the “Benchmark Selection” page to yield a better benchmarking comparison.
The qualitative approach applies four factors, namely industry risk, market position, competitive position and management qualitative factors in gauging credit quality. The qualitative approach is to complete the aspects that are difficult to quantify via technical analysis under the quantitative approach. Users are required to provide inputs and individual judgements under this approach.