Asia sentiment brightens with turnaround in China view: Thomson Reuters/INSEAD
By Saikat Chatterjee
HONG KONG (Reuters) - Sentiment at some of the biggest companies across Asia brightened in the first quarter of 2016, rising from a four-year low registered three months prior, as executives bet on economic improvement in China, a Thomson Reuters/INSEAD survey showed.
The survey in which 97 firms rated their six-month outlook resulted in a Thomson Reuters/INSEAD Asian Business Sentiment Index of 65 for March from 58 in December. A reading over 50 indicates a positive view.
The companies ranked a decline in Chinese demand as the primary risk to their outlooks, followed by excessive foreign exchange volatility and falling oil prices. Yet readings across the region revealed the biggest increase in confidence among firms in China itself and chief trading partners such as Singapore.
"The index is not an amazingly great number but it tells us there is certainly less pessimism now than in previous surveys," said Singapore-based economics professor Antonio Fatas at global business school INSEAD.
"People are digesting the economic slowdown in China and are being more optimistic and looking for opportunities rather than being alarmist, and that shows up in the numbers around the region, particularly Singapore," he said.
The Southeast Asian city-state registered the quarter's steepest rise in sentiment at 29 points, resulting in a neutral subindex at 50 after two deeply pessimistic quarters. In its top trading partner China, sentiment rose 21 points to 71.
Latest government data showed improving economic conditions in China, with fixed-asset investment increasing and capital outflows moderating, top officials said. The government also said it is aiming for economic growth of as much as 7 percent in 2016, after 6.9 percent in 2015 - the slowest rate in 25 years.