Bangalore: While the business sentiment among the Asian companies fell for third quarter, due to the export-oriented economies such as China and Japan, the domestic spending economies of the south-east Asia seem to be more positive, India being one among them. Indian companies showed optimism in Q3; the sentiment might have got lifted further last week by the government reforms aimed at reviving growth.
On the contrary, China showed the lowest level of sentiment since 2009, when the survey was conducted for the first time.
Asian exports of autos, technology and shipping appeared the least positive in the survey. But the sectors more exposed to domestic growth were much more optimistic. The Index surveyed 200 of the Asia-Pacific’s top companies in 11 economies, covering sectors like autos, financial, property, resources and technology, and got 97 responses. Thomson Reuters conducted the poll in association with INSEAD, a global management and business school, in September 13-14. An increase in foreign investment and public spending from government with strong budget positions benefit companies in Southeast Asia than their Western counterparts. All these have increased domestic consumption among the rapidly expanding middle-class, making those companies feel positive in the third quarter.
World’s biggest canned-tuna-maker, Thai Union Frozen Products was upbeat, as it maintained the revenue growth target of 15 percent in 2012. While in Singapore, the robust retail consumption is supporting the outlook for firms such as StarHub, the country’s second biggest telecoms firm. The company official said, "We are a domestic focused company which puts us in a more favourable position. From the past few downturns, we have come out not too bad."
Gary Dugan, Chief Investment Officer for Asia and Middle East at the private bank Coutts said, "Countries such as the Philippines, Indonesia and Malaysia have generally seen upgrades to GDP forecasts, which have been at odds with the rest of the world."
The survey also showed that Asia’s property sector has improved significantly, with five among the 10 respondents marking a positive view on their outlook.India: Upbeat
Indian companies took part in the survey, such as Coal India and Dr Reddy’s Laboratories, were more optimistic than the previous quarter. Business Standard reports that of the 10 companies surveyed six were positive and four were neutral. Meanwhile, the risks counted were economic instability, rising costs and regulatory worries and the employment level remained unchanged this time.
Among the 97 Japanese companies participated in the survey, 54 cited global economic uncertainties as the key risk factor, while other 15 cited other risks including domestic uncertainty and oil prices. Eight of the respondents said rising costs were the key risk. 17 companies showed a neutral outlook; two reported a negative one and only one showed a positive outlook.
Chinese companies were also pessimistic in the survey. Of the six respondents, four Chinese companies had a neutral outlook in the survey, one was positive and one was negative. For majority of them, global economy was the key risk factor, while one cited rising costs. For most of those companies the employment level remained the same, with one reporting a lower level.