Asia corporate sentiment slides on global worries

Sep 13, 2011, 11:08 p.m.
The moon is seen over the Oriental Pearl TV tower in the financial area of Pudong in Shanghai in this September 12, 2011 file photo. Sentiment at Asia's top companies fell in the third quarter, hitting its lowest level since the fourth quarter of 2009 as doubts about the strength of the global economy weighed, a Reuters survey showed. Weak U.S. economic data, a debt crisis in the euro zone and worries about inflation and tighter monetary policy in Asia have clouded the outlook for the global economy, denting sentiment across the board. REUTERS/Carlos Barria/Files

In the financial sector, seven of 11 companies polled said they were neutral about the outlook, compared to the second quarter when seven were neutral, but eight reported a positive outlook.

Sentiment among retailers meanwhile remained stable with three reporting a positive outlook, three reporting a neutral outlook and one reporting a negative outlook. The numbers were the same as the second quarter with the exception that one retailer in the second quarter reported a very positive outlook.


Sentiment remained largely upbeat in China with three quarters of the 16 respondents saying their outlook was positive for the next six months compared to 10 out of 13 in the second quarter which were either positive or very positive.

Japan turned more cautious with 19 companies reporting a neutral outlook compared to 15 in the second quarter. South Korea also turned cautious, with three companies reporting a negative outlook compared to three reporting positive outlooks in the second-quarter survey.

More worried about the coming months were the country's resource companies. Two out of four in the survey gave a neutral outlook, citing concerns over commodity prices as the reason.

"In Q1 and Q2 you saw commodity prices rising very strongly. Those have definitely all rolled over," said James Soutter, a senior fund manager at Perennial International in Melbourne.

"They're not back to dire levels. They're just back to levels we were at 6-12 months ago."

Economists expect a slight slowdown in economic growth in China, which may dip below 9 percent for the first time in more than a decade as weaker demand in debt-ridden Europe and elsewhere squeezes the nation's exporters.

The mood in Japan, Asia's No. 2 economy, was less upbeat, with 19 out of 26 respondents saying they had a neutral outlook for their businesses over the coming months. One was negative, with six feeling positive about their prospects.

(Editing by Matthew Driskill)

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