Asian Sentiment Index Hits 4 Year Low on China Growth Concerns

Sentiment at some of Asia’s biggest firms deteriorated again in the fourth quarter, falling to a four-year low under the weight of concerns about slowing growth in China, the region’s biggest economy, a Thomson Reuters/INSEAD survey showed.

The Thomson Reuters/INSEAD Asian Business Sentiment Index .TRIABS RACSI, representing the six-month outlook at 103 firms, was 58 in the December quarter from 60 in September and 72 a year prior. A reading over 50 indicates a positive view.

China’s economy – growing at its slowest pace in six years – ranked as the chief risk to corporate forecasts for the second consecutive quarter, with volatile financial markets also of concern, showed the survey whose respondents included SoftBank Group Corp (9984.T), Kia Motors Corp (000270.KS), Tata Steel Ltd (TISC.NS) and Olam International Ltd (OLAM.SI).

“A very strong revision to the expected growth rate of China (in recent months) is having a bigger effect on all these numbers, across all countries, across all sectors,” said Antonio Fatas, economics professor at INSEAD in Singapore.

“If you think of growth in Asia, Asia will do well, Asia will grow faster than most of the regions of the world, but it will grow at a rate very different from the previous 10 years.”

At the start of the December quarter, analysts estimated China’s 2016 growth at 6.5 percent versus 6.7 percent estimated three months prior.

via Reuters

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza