Asia's Top Companies are Less Upbeat

Thomson Reuters INSEAD Asia Business Sentiment Survey Shows Asia's Top Companies are Less Upbeat

Mounting Concern over the Euro Zone Crisis and a Slowdown in China's Growth

Singapore, 20 June 2012 – Asia's top companies are less upbeat on their business outlook than in the first quarter, with mounting concern over the euro zone crisis and a slowdown in China's growth, according to the latest Thomson Reuters/INSEAD Asia Business Sentiment Survey, published today. The poll was conducted between June 4-15 and of the 177 companies that responded, 44.07% reported a positive outlook for the next six months, a decline from the 51.35% positive responses in the first quarter. The number of negative responses increased to 6.78% from 4.05% in the first quarter. Neutral responses rose to 49.14% from 44.59%.

Thomson Reuters, the world's leading source of intelligent information for businesses and professionals, in association with INSEAD, the leading international business school, polled more than 200 executives in 11 Asia-Pacific countries across a broad range of sectors including autos, financials, resources, technology, food and retail

Highlights from the survey include:

• The Thomson Reuters/INSEAD Asia Business Sentiment Index declined to 69 in Q2 2012 from 74 in Q1 2012. An index above 50 indicates a positive outlook.

• Global economic uncertainty was the key risk factor cited by 111 of the 177 companies polled, followed by rising costs as cited by 28 companies and FX volatility, cited by nine companies. Other risks cited by those polled include regulatory changes, oil prices, government policy shifts and in the case of Thailand, government instability.

• The Philippines was the most positive country with an index reading of 100 while Australia was the most negative with a reading of 42.

• China – Less Positive: Easing growth in Asia’s largest economy was reflected in the companies’ responses. Four companies were positive, while 13 were neutral and two were negative, compared with eight positive, eight neutral and one negative in the previous quarter. Most were worried about the global economy, while some cited rising costs. Employment levels stayed the same at 17 of the 19 respondents, while one reported lower levels and one higher. Four saw a higher delay in customer payments.

• India – Less Optimistic: Indian companies were less positive than in the quarter before, with growth in Asia's No.3 economy slumping to its lowest in nine years amid a sluggish policymaking environment and a weakening local currency. However, no company in the survey was negative, with seven neutral and six positive. Economic uncertainty, rising costs and regulatory worries were the top risks. Employment levels stayed the same at seven companies, increased at three and declined at three.

• Japan – More Upbeat: Japanese respondents reported improved sentiment as robust private consumption and rebuilding from last year's earthquake and tsunami should offset slowing global growth. Five companies were positive, 18 neutral and one negative. Foreign exchange volatility was seen as the biggest risk by three companies, while economic uncertainty worried the majority. Regulatory risks and competition were other threats mentioned. Five of the 24 respondents saw an improvement in new orders, while 18 said there had been no change and one saw a decrease.

• The index surveyed sentiment at 177 companies in 11 countries in Asia.

• The index was compiled between 4-15 June from a poll of senior executives at Asia's top companies representing industries from autos and banks to technology, resources and property.

• Airlines and the food sector cited rising costs as their chief concern while a majority of the resources sector cited global instability.

• The drug sector was the most positive with an index reading of 83, closely followed by the airline sector with a reading of 80.

• The property sector proved the most pessimistic with a reading of 55 followed closely by the shipping sector with a reading of 56.

• Employment levels appeared relatively stable in the survey with 104 companies saying they were the same while 15 companies reported lower employment levels and 58 saying employment levels at their companies were rising.

• 90 companies in the survey said new orders or sales had risen, while 71 reported the same level as in the previous quarter.

• 163 companies in the survey said their customer payments were about the same as last quarter, although 7 companies said they had increased delays.

The full survey highlights can be viewed online at: http://link.reuters.com/fej88s

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About INSEAD, The Business School for the World

As one of the world’s leading and largest graduate business schools, INSEAD brings together people, cultures and ideas from around the world to change lives and to transform organisations. A global perspective and cultural diversity are reflected in all aspects of our research and teaching.

With campuses in Europe (France), Asia (Singapore) and Abu Dhabi, INSEAD’s business education and research spans three continents. Our 141 renowned Faculty members from 35 countries inspire more than 1,000 degree participants annually in our MBA, Executive MBA and PhD programmes. In addition, more than 6,000 executives participate in INSEAD’s executive education programmes each year.

In addition to INSEAD’s programmes on our three campuses, INSEAD participates in academic partnerships with the Wharton School of the University of Pennsylvania (Philadelphia & San Francisco); the Kellogg School of Management at Northwestern University near Chicago, and Johns Hopkins University/SAIS in Washington DC.
In Asia, INSEAD partners with Tsinghua University in Beijing and the Lee Kuan Yew School of Public Policy at the National University of Singapore. INSEAD is a founding partner in the multidisciplinary Sorbonne University created in 2012, and also partners with Fundação Dom Cabral in Brazil.

In 2009, INSEAD celebrated 50 years as a pioneer of international business education based in Europe. In 2010, INSEAD celebrated the 10th Anniversary of our Asia campus in Singapore. This year, we mark five years of activity in Abu Dhabi.

Around the world and over the decades, INSEAD continues to conduct cutting edge research and to innovate across all our programmes to provide business leaders with the knowledge and sensitivity to operate anywhere. These core values have enabled us to become truly "The Business School for the World." More information about INSEAD can be found at www.insead.edu.

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