Brand owners upbeat in Asia

21 June 2010

SINGAPORE: A majority of brand owners in Asia are optimistic about their prospects over the next six months, figures from Reuters have revealed.

The news agency's first Asia Corporate Sentiment Index was based on a survey of senior executives representing 62 of the region's biggest firms in categories such as automotive, food and technology and financial services.

Overall, participants delivered an average score of 78 points, where a reading of 50 points indicated neutral attitudes and anything above that number demonstrated a feeling of confidence in the market.

Reuters measured this rating against previous internal data, and suggested that totals had jumped from 76 points in the opening quarter of this year and 45 points a year ago.

All of the airlines in the study expected conditions to be "neutral" going forward, while every automaker believed the outlook was "positive", including around a third that argued it was "very positive."

Ten of the 15 featured technology companies were upbeat, as were nine of the 14 financial services providers, a group that contained India's ICICI Bank, recently named as one of the world's most valuable brands.

Half of all retailers and packaged food specialists were anticipating an uptick in the trading climate, while the rest thought the situation would remain largely unchanged.

Corporations from Japan, which included Canon and Hitachi, were more gloomy, with a majority of the country's 20 businesses coming in as "neutral", whereas eight had been "positive" in Q1 2010.

"The pace of recovery in Japan has been more subdued than elsewhere and the domestic economy is still struggling," said Richard Jerram, head of economics at Macquarie Securities in Tokyo.

"It's not as bad as a year ago but you can understand why companies exposed to this may be less positive than others."

In contrast, the organisations headquartered in China were almost uniformly hopeful about their prospects, with sentiment having dramatically improved in the finance sector in particular.

"There's been strong demand across the region and you can divide the contribution between China and policy stimulus during the financial crisis," said Jerram.

Similarly, all seven firms in India were in buoyant mood, a trend that is likely to gain further momentum in the foreseeable future.

"Consumption and the economic growth story are supporting the topline and bottom line of Indian companies, and that's also true for some of the top Asian companies," KK Mital, head of portfolio management services at Globe Capital, said.

Data sourced from Reuters; additional content by Warc staff