Asia business optimism: Phl up

Business optimism at Asia’s top companies dwindled in the third quarter to near a fouryear low, but was still on the upswing in the Philippines while Thai firms were likewise positive.

Concern remained over China’s economic health, sending sentiment in Singapore to its lowest ever and neigh- boring Indonesia was only marginally less downbeat.

The Thomson Reuters/ INSEAD Asian Business Sentiment Index said optimism was highest in the Philippines, while Thailand dipped slightly after the second quarter when it had the brightest outlook in the

region.

The index, representing the six-month outlook at 79 firms, was 60 for July-September versus 71 three months prior, exceeding the 50 mid-point separating optimists from pessimists.

The rundown follows:

Philippines: Most optimistic in a year at 95 vs 78

Philippine companies were the most optimistic toward the coming half-year. Six of 11 saw sales rise in July-September, while data issued ahead of polling showed government spending helped the economy defy a regional slowdown in April-June.

Three respondents cited the political situation ahead of a May election as a risk to their outlook. Two flagged rising competition, and one was concerned about passing on higher raw materials costs.

Singapore: Record negatives leaves index

at 14 in Q3 vs 59 in Q2

Singapore was Asia-Pacific’s most pessimistic economy in the third quarter, as a record five of seven respondents reported a negative six-month business outlook, with four citing economic slowdown in China as their biggest risk.

Two each reported lost orders and increased receivables over the past three months. All seven said staffing was unchanged.

Malaysia: Currency concern puts sentiment at 25

vs 71

Of four responses, two were neutral and two negative. The main concern for two firms was falling emerging-market currencies, such as the ringgit, which has lost 14 percent in three months.

Indonesia: No positive outlooks leave index at 29

vs 75

None of Indonesia’s seven respondents saw positives in their outlooks, with three being negative. Three said the biggest risk was weakening emerging currencies, with the rupiah falling 8.6 percent against the US dollar over the past three months.

Two firms cut staff, two reported a rise in receivables and four lost sales.

South Korea: China concerns send down to 50 vs 69

Two companies each said their outlook was positive, neutral or negative, but all six agreed the biggest risk was slowdown in China where Korean exports have been declining.

Three took on staff over the past three months while four reported higher sales.

Taiwan: Prospect of economic slowdown pushes index to 50 vs 63

Sentiment in export-reliant Taiwan turned neutral as plummeting export orders portend the slowest economic growth in six years.

Of eight responses, two negatives cancelled out two positives. Five said China’s slowdown

cause for concern, and five reported lower sales.

Thailand: Least optimistic in almost three years at

60 vs 94

The last survey’s most optimistic economy suffered a lapse in certainty, in a quarter when the national economic adviser cut its annual growth forecast in anticipation of a third year of export decline.

Of 10 respondents, four said their biggest risk was a slowing China. Two pointed to domestic demand, while one cited the US rate rise. Three each said staff and sales had risen.

Japan: Five and a half-year high at 73 vs 60

Firms with a neutral outlook outnumbered positives six to five, leaving sentiment even higher than during the “Abenomics” euphoria, when share prices rose after Prime Minister Shinzo Abe was elected in December 2012 promising economic change.

Seven firms said Chinese economic slowdown was their primary risk, whereas two cited weakening emerging currencies.

India: Slow pace of reform pushes optimism down

to 79 vs 84

Sentiment was buoyant though firms were irked by the pace of economic reform promised by a new government last year. During survey polling, the government dropped a tax plan, citing lack of support.

Of seven respondents, from 19 previously, one expressed India’s first negative outlook for two and a half years.

Two cited China’s slowdown as the chief risk, while another two flagged weakening emerging currencies. Three took on more staff over the past three months and two booked a rise in sales.

China: Most upbeat in four years at 80 vs 55

Five firms offered outlooks versus 11 previously, with three positive and two neutral.

Just one said its biggest risk was the economy growing at its slowest pace in a quarter of a century, exacerbated by a stock market crash that prompted policymakers to cut interest rates and devalue the yuan.

One said its chief risk was the impact of a US rate rise, whereas two pointed to weakening emerging currencies. All five said staffing was unchanged.

Australia: Economic uncertainty yet

index rises to 83 vs 71

Three Australian firms responded to the survey compared with 12 three months prior, of which two were positive for the coming halfyear and two took on more staff over the past three months.

Australia is shifting toward an economy driven more by services than resources as a mining boom fades. One firm cited the pace of adjustment as its chief risk.

Companies surveyed change from quarter to quarter.