Pan-Asia: Asian business sentiment edges up to hit 7-year high, according to poll

• Business confidence among Asian companies rose in 1Q18 to the highest level in seven years, a Thomson Reuters/INSEAD survey showed, as a fresh surge by the Chinese economy offset concerns about rising trade barriers.
• The Thomson Reuters/INSEAD Asian Business Sentiment Index, representing the six-month outlook of 67 firms, advanced one notch to 79 for 1Q18 compared with 4Q17.
• A reading above 50 indicates a positive outlook.
• Thailand, the Philippines and Malaysia saw robust jumps in sentiment, showing that many countries in Asia continue to benefit from accelerating global growth.
• In particular, China has seen exports soar, up 45% in Feb 18 to mark their fastest growth in three years.
• The subindex for Thailand surged to 100 from 85 and the Philippines saw a climb to 83 from 70 while sentiment in Malaysia improved five notches to 75.
• Australia’s subindex dropped to 80 from 92, although the figure is relatively high when compared with its historical average of 69.
• While the International Monetary Fund and the World Bank have raised their global growth forecasts for 2018 due to strong trade, consumer spending, and investment in many major economies, intensifying rhetoric in favour of protectionism has become a major concern.
• United States President Donald Trump has announced import tariffs on steel and aluminium, and is expected to consider additional tariffs targeted specifically at China.
• He has also repeatedly said the US free-trade deal with South Korea is “unfair” and has threatened to scrap it altogether on multiple occasions.
• That has battered sentiment in South Korea, with the country’s subindex plunging to 50 from 83.
• Singapore’s subindex declined to 75 from 79. The country’s exports took a surprise dip in Feb 18 as tech product shipments continued to retreat from the hot pace of recent months.
• Japan, where consumer spending numbers have been subdued, recorded its lowest reading in a year, at 67 compared to 4Q17’s 70. India also experienced a decline in sentiment, falling to 72 from 79.
• The index for sentiment in China increased to 88 from 83, but the number of respondents was low at four companies.
• Increasing trade friction and higher interest rates were cited as the biggest concerns in the Thomson Reuters/INSEAD survey.
• By industry, the technology, construction, energy and metals sectors expressed concern about trade friction, showed the survey, which was conducted 2 – 16 Mar 18.
• Sectors which identified rising interest rates as a risk included the energy, real estate, retail and technology sectors. The energy sector also showed concern about the potential for a sudden asset price correction.
• The auto sector matched its highest subindex reading posted seven years ago, while the retail and leisure sector recorded its best ever reading. Healthcare had its highest score in two years.

External Link : http://fingfx.thomsonreuters.com/gfx/reuterscom/1/62/62/AsiaSentimentSurvey_2018_MAR.pdf

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