HIGHLIGHTS-Asia Q4 Business Sentiment Survey - by economy

MUMBAI Tue Dec 17, 2013 10:15pm EST

MUMBAI Dec 18 (Reuters) - Asia's top companies were less upbeat about their business outlook in the last quarter of the year, compared to the third quarter, with lingering concerns over the global economy and rising costs among the major issues weighing down sentiment, the latest ThomsonReuters/INSEAD Asia Business Sentiment Survey published on Wednesday showed.

The Thomson Reuters/INSEAD Asia Business Sentiment Index declined 4 points to 62 in December, falling for the second consecutive quarter. The index had dropped to 66 in September, a fall of 5 points from the June survey.

A reading above 50 indicates an overall positive outlook.

AUSTRALIA: SLIGHTLY BETTER (INDEX AT 80 vs 79 IN Q3)

Business confidence among companies in Australia improved for the sixth consecutive quarter, pushing the country's sentiment index to its highest level since the last quarter of 2010. More participants said orders had increased and employment levels were either the same or improved.

Of the 10 respondents, four companies were neutral while six were positive about the business outlook. In the previous quarter, of the seven respondents, three were neutral and four positive.

Two-thirds of the participants said world economic uncertainty was their top worry, while the rest considered rising costs as their main concern. Half the participants confirmed orders have increased, a big shift from just 1-of-7 participants in the September survey.

Twenty percent of companies surveyed also reported improvement in employment levels, while the rest said levels remained the same.

CHINA: SHARP IMPROVEMENT (INDEX AT 75 VS 50 IN Q3)

Corporate sentiment in China improved sharply after remaining steady for two quarters, with half of the 10 respondents expecting an improvement in business outlook, while the others see it remaining the same.

Five of the participants see global economic uncertainty as their primary concern, while three believe they will be affected most by rising costs. Significantly, two companies listed other risks such as regulatory uncertainty or political instability as their main worry.

Six respondents saw an increase in orders, compared to three in the previous quarter, while more companies said employment levels remained at the same level.

INDIA: SENTIMENT SURGES (INDEX AT 82 VS 67 IN Q3)

Companies in India were the most positive with a reading of 82, a sharp increase from 67 in the previous quarter - their best performance in a year. This was also reflected in the number of participants nearly trebling to 17, which included Tata Consultancy Services, Reliance Industries and Larsen & Toubro.

With high inflation continuing to plague the Indian economy, a third of the participants cited rising costs as their primary concern. An almost equal proportion listed global economic uncertainty as their main worry.

With national elections just months away, three of the participants saw other risks, which include regulatory and political uncertainty, as their biggest worry.

Sixteen companies reported an improvement in orders, compared to just five in the previous survey, while most participants said employment levels had remained the same.

JAPAN: LOSES STEAM (INDEX AT 55 VS 63 IN Q3)

Business sentiment in Japan turned weaker after two steady quarters, with the global economic environment, rising costs and political or regulatory uncertainty weighing on corporate outlook.

Of the 30 respondents, which included Daiichi Sankyo Co Ltd , Toshiba Corp, Honda Motor and Sharp Corp, two were negative on the outlook, five positive and 23 neutral. In the previous survey, none of the participants were negative and five were positive.

Global economic worries posed the biggest challenge for 10 of the Japanese companies, while rising costs and other risks tied in as the primary concern for the second-highest number of companies, at seven each. Eleven companies reported an improvement in orders, compared to five in September.

SOUTH KOREA: STEADY (INDEX UNCHANGED AT 50)

Business confidence was unchanged for the second quarter in a row. All 12 respondents, including Hyundai Heavy Industries Co Ltd and Samsung Electronics, were neutral about their outlook. A majority said the global economy was their top business risk, while two saw rising costs as a concern.

Three respondents reported an increase in orders, down from four in the previous quarter. The majority of the participants said orders remained steady.

TAIWAN: REBOUND IN SENTIMENT (INDEX AT 63 VS 50 IN Q3)

Optimism returned to Taiwan's sentiment index, reversing the decline in the September quarter. Two of the eight respondents turned positive in their outlook, compared with none in the previous survey.

An overwhelming majority of the companies saw global economic uncertainty as the biggest risk to their business, while one said other risks posed the top worry. Three companies reported an increase in orders, compared to just one in the previous quarter.

Acer Inc and Yuanta Financial Holdings Co were among those taking part in the survey.

SOUTHEAST ASIA: MOSTLY WEAK, THAILAND TURNS NEGATIVE (THAILAND 40; PHILIPPINES 58; SINGAPORE AT 50; MALAYSIA AT 75)

Sentiment in Southeast Asia was mostly downbeat, with Malaysia being the only exception, improving its index reading to 75 from 69 in the previous survey. Half of the respondents from the country continued to report an improvement in orders.

Singapore's reading remained steady with all 15 respondents reporting no change in sentiment from the previous quarter. Most of the companies cited the global economy as the biggest risk.

The Philippines posted its lowest ever reading of 58, down from 100 in the previous survey, with an equal number of respondents citing global economic uncertainty and other risks as the main reasons for concern. Only half of the six respondents continued to have a positive business outlook. By comparison, all 12 respondents in the previous survey had been positive.

Thailand was the only economy to turn in a negative score with a reading of 40, a sharp drop from Q3 when it posted a reading of 71. Two participants rated other risks as the main worry, an indication of the uncertainty because of the turmoil currently engulfing the country and its government. Four participants cited the global economy as the main concern, and another three said rising costs were the biggest challenge.

There were no responses from Indonesia, the region's biggest economy.

Notes:

** Companies sampled for the survey may change from one quarter to the next.