INSUBCONTINENT EXCLUSIVE:
More than half of the companies surveyed expected staffing levels and business volumes to declineBusiness sentiment of Asian companies sank
to an 11-year low in the second quarter, a Thomson Reuters/INSEAD survey found, with some two-thirds of the firms polled flagging a
worsening COVID-19 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
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 coronavirus-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 crossed 8 million.After weeks with almost no new coronavirus 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 RECOVERYChina, where the novel coronavirus 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 that are bearing the brunt of travel
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), that
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, stabilize, and grow," Paitoon said.Morgan
Stanley said it expects a macro shift 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 delever to renew policy
