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Business sentiment among S’pore firms up slightly in Q3

SINGAPORE—Business optimism in Singapore rose slightly while the overall business sentiment for Asia as a whole has dropped, according to a survey by Thomson Reuters and Insead released yesterday.

SINGAPORE—Business optimism in Singapore rose slightly while the overall business sentiment for Asia as a whole has dropped, according to a survey by Thomson Reuters and Insead released yesterday.

Singapore posted a sub-index score of 64 in the July-to-September period, up slightly from 62 in the previous quarter. Twenty-six Singapore-based companies took part in the survey.

The Thomson Reuters/Insead Asian Business Sentiment Index, representing the six-month outlook of 86 firms, slipped to 69 for the third quarter from 74 three months earlier.

A reading over 50 indicates a positive view.

Business confidence among Asian companies fell for the first time in three quarters in July-September as escalating geopolitical tensions outweighed an improved performance by most economies in the region, said the report.

“Companies expressed concerns this quarter about trade and diplomatic tensions not only in the region, but also in the world,” said Dr Antonio Fatas, Professor of Economics at global business school Insead.

“This brought the index down, in a reflection of cautiousness because of the potential risks that could derail the current state of the economy.”

China, India and South Korea led the fall in sentiment in the third quarter, reflecting regional tensions and sluggish growth.

South Korea’s sub-index fell the steepest among its peers in the survey, dropping to 50 from 75 in the previous quarter. The country has been rattled by North Korea’s series of nuclear tests and missile launches, noted the report.

Trade friction with China has also risen over Seoul’s deployment of a United States anti-missile system to counter the North Korean threat.

China, upon which much of Asia depends for trade, saw its sub-index fall to 63, its lowest since the last quarter of 2015. China’s gross domestic product rose 6.9 per cent in the second quarter, but growth is expected to slow on tighter debt regulations.

Most South-east Asian economies reflected a stable outlook.

The sub-index for Malaysia, the Philippines and Taiwan remained unchanged over the previous quarter.

The survey showed that while the proportion of respondents with a positive bias fell to 47, the lowest level since the December quarter of last year, companies which were neutral rose to 45, the highest level since the March quarter of last year.

Sectors including retail, metals, real estate and technology showed bullish trends while others such as autos, construction, healthcare and transport were more subdued, according to the report.

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