Dec 19 Asia's top companies grew slightly more
confident on their business outlook in the fourth quarter,
reversing two consecutive quarters of declining confidence,
according to the latest Thomson Reuters/INSEAD Asia Business
Sentiment Survey, published on Wednesday.
The Thomson Reuters/INSEAD Asia Business Sentiment Index
rose to 63 in December from 62 in September, when it saw
a 7-point fall from the June survey. A reading above 50
indicates an overall positive outlook.
AIRLINES: MOST PESSIMISTIC (INDEX AT 0 VS 67 IN Q3)
The only carrier polled was negative in its outlook, making
airlines the most pessimistic sector. Global economic
uncertainty that hurt travel mostly to and from the euro zone
has eaten into airlines' margins in recent quarters. High fuel
prices and regulatory uncertainty remain concerns for
AUTOS: MOSTLY NEUTRAL (INDEX AT 60 VS 50 IN Q3)
Four out of five automakers polled had a neutral outlook,
while just one respondent had a positive outlook. Apart from
economic uncertainty, the risk of foreign exchange volatility
kept carmakers uncomfortable.
BUILDING: TURNS MORE BEARISH (INDEX AT 25 VS 33 IN Q3)
Sentiment for the building sector continued to deteriorate,
with one respondent having a negative outlook, and the other a
neutral view. One of the participants cited global economic
uncertainty as a risk, while another participant said declining
business confidence dented the outlook.
FINANCIALS: SENTIMENT WORSENS (INDEX AT 50 VS 57 IN Q3)
Financials were mostly neutral with all but one of the 18
respondents saying that global economic uncertainty may hurt
their businesses going forward. One participant said rising
costs was the biggest risk.
FOOD: MOST BULLISH (INDEX AT 77 VS 73 IN Q3)
Food and drinks companies were the most bullish with an index
reading of 77 for the quarter, an improvement on the last
quarter's 73. Six out of the 11 companies polled had a positive
outlook, while the rest were neutral. Higher costs were a
concern, and commodity price volatility and changes in
consumption trends also posed a risk. An overwhelming eight
respondents said new orders were likely to increase.
DRUGS: OPTIMISM FADES (INDEX AT 72 VS 80 IN Q3)
Four of the nine drugmakers had a positive outlook for the
fourth quarter and the rest were neutral, but the average index
still fell for the second straight quarter. Drugmakers mostly
cited global economic uncertainty as the biggest concern. Six
respondents said they expected new orders to rise.
PROPERTY: WEAKENED SENTIMENT (INDEX AT 69 VS 75 IN Q3)
Property companies saw a fall in sentiment during the fourth
quarter and were mostly neutral. These companies had seen
significant improvement in business sentiment in the third
quarter, when five of 10 surveyed responded with a positive view
and the others with a neutral view. One company cited regulatory
uncertainty as the biggest risk in the fourth quarter.
RESOURCES: UPTICK IN SENTIMENT (INDEX AT 68 VS 63 IN Q3)
Half of the 14 resource firms were positive on their outlook,
and most of them expected customer payments to remain stable.
Three participants said rising costs was the biggest risk they
faced, while most others worried about global economic health.
Seven participants saw no change in new orders.
RETAIL: SIGNIFICANT IMPROVEMENT (INDEX AT 75 VS 50 IN Q3)
Retail companies showed strong improvements in sentiment in
the fourth quarter, with four participants saying they were
positive, while the rest were neutral. Rising costs and the
health of the global economy were cited as the main risks to the
outlook by retailers. One of the eight respondents, which
included CP All, Fast Retailing and Galaxy
Entertainment, said increased competition posed another
SHIPPING: TURNS BULLISH(INDEX AT 67 VS 50 IN Q3)
Sentiment for shipping companies improved, with none of the
six companies polled being bearish. None of them said they were
worried about rising costs or foreign exchange volatility, and
most of them expected customer payments to remain the same. This
was in contrast to the mixed responses from shipping companies
in the previous quarter, when one company held a positive view,
one neutral, and a third negative.
TECHNOLOGY: SENTIMENT ERODES FURTHER (INDEX AT 57 VS 58 IN
Technology firms were less optimistic. Ten of 14 companies
polled were neutral about their outlook, three were positive,
and one was negative. In the last survey, 13 of 18 participants
were neutral and four were positive. The majority of the tech
companies surveyed cited global economic uncertainty as their
biggest business risk. Two said regulatory uncertainty was their
** Companies sampled for the survey may change from one
quarter to the next.