Ratings firm Standard and Poor's (S&P) issued fresh warning on emerging market sovereign downgrades on Monday. Emerging market sovereigns face rising risks to their credit quality despite still strong foreign investment inflows said S&P Global Ratings in a report.

As Fed starts to gradually raise interest rates bringing an end to its super-accommodative policy stance, tightening international liquidity will hit emerging market countries like Turkey, Venezuela, and Argentina the hardest because they are the most dependent on capital inflows. Weakening governance as well as potential for geopolitical conflicts, also pose risks to emerging market sovereign creditworthiness, notes S&P.

The slowdown in global growth and world trade and concerns about slowdown in Chinese growth could add to concerns of emerging markets that are highly dependent on trade, it noted.

“Nine of the 20 top emerging market sovereigns–those with the largest absolute amount of sovereign debt outstanding–have negative outlooks, indicating a possible downgrade over the next two years, against just two positive outlooks,” said Moritz Kraemer, Global Chief Rating Officer for Sovereign Ratings.