Reuters News Asia Corporate Sentiment Survey

Reuters News Asia Corporate Sentiment Survey

June 15, 2011 - Reuters News, the world’s largest international news agency, polled 100 executives in 11 Asia-Pacific countries across a broad range of sectors including autos, financials, resources, technology, food and retail. The poll was conducted between June 2-10 and of the 77 that replied, 48% were positive about the six-month business outlook, a decline from the 61% positive outlook in the previous quarter. More than 45% were neutral in their outlook with almost 6% reporting a negative outlook. One “very negative” response was reported from Japan, which suffered its worst earthquake on record in March.

• Business sentiment at Asia's top companies fell in the second quarter to its lowest since the third quarter of 2010, weighed down by rising costs and growing doubts over the strength of the global economy.
• The Reuters Asia Corporate Sentiment Index fell to 71 from 80 in the first quarter of 2011, which was the highest level since Reuters began collecting data in June 2009. An index above 50 indicates a positive outlook.
• Weak U.S. economic data, worries about inflation and tighter monetary policy in Asia and a debt crisis in the euro zone have clouded the outlook for the global economy, weighing on sentiment across the board.
• In Japan, 15 of 21 companies were neutral on the outlook with four positive and two either negative or very negative. This was little changed from the first quarter survey, which most companies responded to just before the earthquake.
• Sentiment turned more cautious in Australia and Southeast Asia, while corporates in China and India remained the most upbeat in the region.
• Government policy, regulation and higher interest rates were also cited as concerns by corporates in Singapore, Malaysia, India and Australia.
• Resource companies in the Asia Pacific region were overwhelmingly positive with one very positive response. The sector has been benefiting from soaring demand in China as the mainland soaks up goods to feed the second-largest economy in the world.
• "We haven't seen the peak of inflation in Asia yet, although central banks are mostly tightening their policy rates...Input prices are getting more expensive and wages are higher across the region and these should continue to squeeze companies’ profitability and margins," said Nuchjarin Ranarode, an economist at Capital Nomura Securities in Bangkok.
• Other companies that participated in the poll included Australia’s Rio Tinto , Singapore’s DBS , India’s Infosys and China’s Ping An Insurance <2318.HK> <601318.SS>.

Please refer to the full Reuters news Asia Corporate Sentiment Survey (PDF link to come) for more information. Michael Flaherty, editor-in-charge of Asia Companies News, will be available for comments.

PDF LINK:
http://r.reuters.com/fud22s

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