Business confidence among Asian companies rose over the past three months to the highest in almost seven years due to robust consumption and global trade, a Thomson Reuters/INSEAD survey showed.
The Thomson Reuters/INSEAD Asian Business Sentiment Index, representing the six-month outlook of 94 firms, rose from 69 last quarter to 78 this quarter, its highest since the January-to-March quarter in 2011.
A reading above 50 indicates a positive outlook.
Improvement in sentiment in Australia, China and South Korea drove gains in the overall index. Sentiment in Indonesia and Thailand was also strong, showing that many countries in Asia continue to benefit from accelerating global growth.
“The index shows that the slow strengthening that we have seen in the world economy has lifted business sentiment in Asia,” said Antonio Fatas, a Singapore-based economics professor at global business school INSEAD.
“Asia is a reflection of what is happening in the world,” he said.
The index measuring sentiment in Australia rose from 69 last quarter to a record high of 92 this quarter. The country’s ruling coalition has recovered from a dual-citizenship crisis that threatened to throw policymaking into turmoil.
Signs of a rebound in consumer spending, Chinese demand for Australian metals and growing capital expenditure in other sectors has also underpinned sentiment.
China, upon which much of Asia depends for trade, saw its subindex rise to 83, the highest since the third quarter of last year.
The market reforms that Chinese President Xi Jinping (習近平) laid out at the Chinese Communist Party’s 19th National Congress in October has fueled optimism that the world’s second-largest economy can manage a surge in house prices and credit growth.
South Korea’s subindex rose from 50 to 83 to reach the highest level since the second quarter of 2011, as international pressure has so far slowed the pace of North Korea’s missile tests for its nuclear weapons program.
The subindex for Indonesia slipped from 100 last quarter to 92 this quarter, but remained at a high level. Sentiment in Thailand and India improved, while sentiment in Taiwan fell to the lowest level in more than a year.
The IMF and the Organisation for Economic Co-operation and Development have raised their global growth forecasts for this year due to strong trade, consumer spending and investment in many major economies.
However, the outlook is not without risk. Respondents to the survey, which was conducted from Dec. 1 to Friday last week, showed that companies’ biggest concern was a sudden correction in asset prices.
US stocks have repeatedly set record highs this year and stock markets in most other countries have rallied strongly due to expectations for faster growth.
Some analysts have expressed concerns that global stock prices might be overheating.
Companies from the transportation, healthcare, energy and finance sectors also expressed concern about a correction in asset prices, the survey showed.
Industries subject to frequent mergers and acquisitions, such as technology, metals, natural resources and healthcare, identified increased regulatory scrutiny of cross-border transactions as a risk, it showed.
Many companies have concerns about protectionism, which can hurt not only exports, but also become a barrier to making acquisitions overseas.
Of companies surveyed, nine respondents identified political instability and geopolitical risks as their biggest concerns, because events on one side of the globe, such as Britain’s negotiations to leave the EU, can have consequences elsewhere.
“The impact of Brexit affected British demand for tourism aboard,” said Supitcha Fooanant, senior investor relations manager at Minor International PCL, Thailand’s leading hotel and restaurant operator. “We saw a decline in British tourists in our hotel portfolio. Fortunately, our successful diversification strategy enables us to maintain resiliency and consistently achieve robust results.”
On the downside, the subindex for Taiwan fell from 75 last quarter to 50 this quarter, but the decline might have been exaggerated by a smaller sample size.
The index for Malaysia weakened from 75 to 64 as respondents expressed concern about consumer sentiment.
Business sentiment for the Philippines fell from 83 to 70, while sentiment in Japan eased from 75 to 70.
In Singapore, the sentiment subindex rose from 64 to 79.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
RSS