Poll: Asia sentiment hits 5-quarter high as China, Brexit worries ease-Thomson Reuters/INSEAD

KCC

21/09/2016 04:00

(For further coverage, Eikon users please search ".TRIABS", or 
news code "ASIATOPCO/") 
    * Sentiment index 68 in Q3 vs 67 in Q2 
    * Trump presidency, energy price seen as key risks 
    * Philippines firms most positive, Singapore least 
    * Real estate, utilities most positive; construction least 
 
    By Hyunjoo Jin 
    SEOUL, Sept 21 (Reuters) - Sentiment at Asian companies 
edged up to its highest level in five quarters in 
July-September, boosted by signs that China's economy is 
stabilizing and as concerns about Britain's move to exit the 
European Union recede, a Thomson Reuters/INSEAD survey showed. 
    But businesses cited the policy uncertainty from a potential 
victory for U.S. Republican presidential candidate Donald Trump, 
as well as energy prices as key risks.  
    The Thomson Reuters/INSEAD Asian Business Sentiment Index 
 .TRIABS   RACSI , representing the six-month outlook at 118 
firms, was 68 in the third quarter against 67 three months prior 
- marking the third consecutive quarterly gain from a four-year 
low in December. A reading over 50 indicates a positive view. 
    "The risks in China look more manageable. Brexit has not yet 
resulted into a full-blown crisis so there is a hope that it 
will be contained," said Antonio Fatas, a Singapore-based 
economics professor at INSEAD. 
    The index started in 2009 with an all-time low of 45, but 
has largely hovered between 60 and 70 in the years since then. 
    China, the world's second-biggest economy, had a subindex of 
90, its highest since the first quarter of 2011. Four of five 
respondents in China rated their six-month business outlook as 
positive, while one was neutral. 
    China's factory output and retail sales grew faster than 
expected in August buoyed by a strong housing market and a 
government infrastructure spending spree, suggesting the 
country's third-quarter growth is holding up better than 
expected.  urn:newsml:reuters.com:*:nL3N1BP1HF   
    Australia, a major supplier of resources to China, saw this 
quarter's biggest gain in sentiment, with a 19-point jump in its 
subindex to 88, as the economy expanded at its fastest annual 
pace in four years in the second quarter.  urn:newsml:reuters.com:*:nL3N1BI4TZ 
    Singapore was this quarter's steepest decliner, with a 
25-point slump in its subindex to 38. Singapore's exports in 
August stagnated, adding to concerns for the city-state which 
has been hurt by the tumble in oil prices and last month cut its 
economic growth forecast.  urn:newsml:reuters.com:*:nL3N1BQ2RZ 
    In contrast, companies in the Philippines were the most 
optimistic for a fifth straight quarter, with a subindex of 94, 
due to strong economic growth in the Southeast Asian nation. 
    South Korea and Japan posted a neutral index of 50 each, 
with business sentiment dropping from 73 in the case of Korea 
and climbing from 46 for Japan.    
    A Trump U.S. presidency and energy prices were most often 
cited as the biggest business risks for the firms, with 15 of 
114 responses each, followed by China's rising corporate debt at 
14.  
    "Yes, Trump represents a risk," said INSEAD's Fatas, adding 
these included geopolitical risk and a lack of concrete economic 
proposals.  
     
    SECTOR OUTLOOKS 
    Other risks cited by the survey respondents included 
sluggish consumer sentiment with eight mentions while seven 
firms cited foreign exchange volatility. 
    The latest poll, conducted Sept. 1 through Sept. 17, showed 
49 percent of respondents had a positive outlook - the highest 
in nearly two years. Thirty eight percent were neutral while 13 
percent were negative.  
    By sector, sentiment rose the most in the real estate 
sector, with a subindex climbing 12 points to 75, making it 
among the top performers. 
    The biggest decliner was the retail and leisure sector, with 
its reading falling 14 points to 68.  
    The construction & engineering sector remained the most 
downbeat, with a reading of 58. But the mood was bright in South 
Korea, where construction began on a record 720,000 new 
residential units last year. 
    "We expect construction materials to boom until next year as 
the construction market has been experiencing a strong demand 
last year and this year," KCC  002380.KS , a leading South 
Korean construction materials maker, said in an emailed 
statement.     
    Respondents who agreed to be identified included Oil Search 
 OSH.AX , Hero MotoCorp  HROM.NS , Hitachi  6501.T , Kossan 
Rubber  KRIB.KL , Philippine National Bank  PNB.PS  and Advanced 
Semiconductor Engineering  2311.TW . 
    Note: Companies surveyed can change from quarter to quarter 
 
    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ 
Highlights by economy     L3N1BU08Q  
Highlights by sector      L3N1BU0BW  
PDF of survey    http://tmsnrt.rs/2cEIMbW 
Graphic: Business sentiment index    http://tmsnrt.rs/1Qec4uG 
Graphic: : Biggest perceived risks    http://tmsnrt.rs/1QebWeT 
Graphic: Outlook by economy    http://tmsnrt.rs/1Uxuw24 
Graphic: Outlook by sector    http://tmsnrt.rs/1UxuFT3 
Advisory     L3N1BW3C2  
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> 
 (Reporting by Hyunjoo Jin; Editing by Muralikumar Anantharaman) 
 ((hyunjoo.jin@thomsonreuters.com; 82-2-3704-5685; Reuters 
Messaging: hyunjoo.jin.thomsonreuters.com@reuters.net)) 
  
((Reuters reporter Hyunjoo Jin will be taking questions on the survey from 0600 GMT in the Global Markets Forum and Trading India community chatrooms. To join, please click http://bit.ly/1kTxdKD or contact your account manager.)) 
 
Keywords: ASIA BUSINESSSENTIMENT/ (URGENT, POLL, GRAPHICS, P