Emerging market corporate issuers across Europe, Middle East and Africa (Emea) region are expected to increase capital expenditures this year as they become more optimistic about growth prospects.

That is the view of Fitch ratings in a report published yesterday.

No meaningful change is expected for the investment plans of corporate issuers in the developed markets, aside of property and construction, where investment levels are expected to decline further.

'To a large extent, emerging market corporate capital expenditure plans reflect issuers' expectations of the growth prospects for their businesses,' said Fitch's head of emerging market corporates for the Emea region Raymond Hill. 'However, to some extent, the investment outlook will also reflect the availability of credit and the creditworthiness of particular industries and issuers, with capital-constrained banks having become more selective.

Fitch's forecasts for its portfolio of 107 rated emerging market corporate issuers across the region indicate an aggregate increase in investment of 14 per cent for 2010, with investment levels currently expected to remain of a similar magnitude in 2011.

In contrast, Fitch's expectations for corporate issuers in developed markets are for a small decline in capital expenditures this year, followed by a low single digit percentage increase next year.-TradeArabia News Service