Complete pessimism’: Asian companies brace as virus resurfaces

Business sentiment among Asian companies sank to 11-year low in second quarter over fears of second wave, survey shows.

About 16 percent of the 93 companies surveyed in a new poll said a deepening recession was a key risk for the next six months [Paul Yeung/Bloomberg]

Business sentiment among Asian companies sank to an 11-year low in the second quarter, according to the findings of a new survey, with about two-thirds of the firms polled flagging a worsening corona virus pandemic as the biggest risk over the next six months.

While the pandemic’s initial impact was reflected in the March survey, confidence during the June quarter fell by a third to 35, only the second time the Thomson Reuters/INSEAD Asian Business Sentiment Index has slumped below 50 since the survey began in the second quarter of 2009.

A reading above 50 indicates a positive outlook. The last time the index showed a reading below that was in its debut quarter, when it hit 45.

About 16 percent of the 93 companies surveyed also said a deepening recession was a key risk for the next six months, with more than half expecting staffing levels and business volumes to decline.

“We ran this survey right at the edge, when things were getting really bad,” Antonio Fatas, Singapore-based economics professor at global business school INSEAD, said of the survey conducted between May 29 and June 12.

“We can see this complete pessimism, which is spread across sectors and countries in a way that we haven’t seen before.”

Many countries are easing corona virus-related lockdowns, but worries have mounted that another wave of infections could hurt economies that have been battered from weeks of curbs on travel and movement. Cases globally have risen above eight million.

After weeks with almost no new corona virus infections, China recorded dozens of new cases in recent days, roiling fragile equity markets. South Korea too faces an uptick after early successful containment.

Companies from 11 Asia Pacific countries responded to the Thomson Reuters/INSEAD survey.

Participants included Thai hospitality group Minor International, Japanese automaker Suzuki Motor Corp, Taiwanese contract manufacturer Wistron Corp and Australia-listed Oil Search.

No V-shaped recovery

China, where the novel corona virus was first detected, reported that industrial output quickened for a second straight month in May, but a weaker-than-expected gain suggested that recovery remained fragile.

“It tells us that the recovery will take time and it won’t be a V-shaped recovery,” said Jeff Ng, senior treasury strategist at HL Bank.

Governments have rolled out stimulus measures to support ailing economies. Singapore and Hong Kong, among the most open economies in Asia, have backed sectors such as airlines, which are bearing the brunt of travel restrictions.

Last week, the US Federal Reserve said it would likely hold its benchmark interest rate near zero through 2022, signalling it expects a long road to recovery.

But recessions in most major economies are still expected to be more severe this year than forecast, Reuters polls of more than 250 economists published in late May show.

Chaiyapat Paitoon, chief strategy officer at Minor International (MINT), which operates brands such as Marriott and Four Seasons and gets the bulk of its revenue from Europe, said the company had taken several cost-saving measures to minimise the impact on its profits.

“MINT’s main priorities are to survive, stabilise, and grow,” Paitoon said.

Morgan Stanley said it expects a shift in economic policies in the aftermath of the pandemic.

“Every big slowdown leaves a mark on macro balance sheets. The significant fiscal easing undertaken means that ratios of public sector debt to gross domestic product are likely to rise over the next two years,” Morgan Stanley economists said in a recent report.

“When the going gets good, policymakers will need to deliver to renew policy space.”



  1. Profile photo ofItz Kvng Twitch


    Very interesting

  2. Reply

    Nice exposure

  3. Reply


  4. Reply

    Thanks for sharing

  5. Reply

    Good one

  6. Reply

    Nice update

  7. Reply


  8. Reply


  9. Reply

    This is really good and interesting to know

  10. Reply

    Good sharing

  11. Profile photo ofSIRMUSTY


    hope is not a second wave

  12. Reply

    It’s well

  13. Reply

    Nice information

  14. Reply

    They should do something

  15. Reply


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  19. Reply

    Good to know

  20. Reply

    Very good

  21. Reply


  22. Reply

    very good

  23. Reply

    The virus has dealt with us

  24. Reply


  25. Reply

    Great one

  26. Reply


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  28. Reply

    Tnks for this

  29. Reply


  30. Reply

    Cool information…..thanks for the update

  31. Reply


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