Do they make for good stock bets?For a rating agency, credit growth in the economy is critical to sustain the business, since it implies higher borrowings by businesses and, by extension, more credit rating opportunities. all augur well for rating agencies,” says Kajal Gandhi, Research Analyst, ICICI Securities.At the same time, there is greater regulatory focus on rating agencies. “With tighter regulations, differentiation between rating agencies is gradually coming to the fore and pedigreed players will benefit,” says G.V. Limited competition in the industry supports high pricing power enabling the rating agencies to earn healthy margins. Investors should keep these factors in mind before investing in stocks of credit rating agencies

Source: Economic Times July 17, 2017 00:56 UTC