ECONOMY | Staff Reporter, Singapore

ASEAN CEO confidence rebounds in January as oil prices drop

Sales and hiring are expected to improve.

Top business leaders in Southeast Asia were more optimistic in January despite the rout that shook global markets in the first month of the year.

In the first quarter, the YPO Sales Confidence Index for ASEAN nations jumped 9.8 points to 67.8 while fixed investment increased an impressive 9.1 points, landing at 64.4. Hiring expectations were optimistic as well, with confidence climbing 5.2 points to 60.6.

In the preceding quarter, the YPO Global Pulse Index for ASEAN countries - Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam amongst others - fell to its lowest level in six years.

The increase in confidence by YPO leaders in the region appears surprising given the collapse of global stock prices triggered by the slowdown of China markets and the dramatic decline in oil prices. The upswing in confidence is most pronounced in China where sentiment jumped 10.0 points from 52.0 to 62.0.

"The sharp drop in oil prices could, in fact, provide considerable stimulus to economic activity in Asia. In particular, the largest economies in Asia - China, Japan, India, and South Korea - along with Taiwan and Thailand are oil importing countries that will benefit significantly from the price drop. Lower gas prices should leave consumers with more money to spend on other goods and services," said Boon Wee Kuah, CEO of MTQ Corporation and a member of the YPO Singapore Chapter.

Across the region, the YPO Global Pulse Confidence Index of CEO economic sentiment for Asia rose 2.4 points in January to 59.7, after having declined 10 points in the previous five quarters. 

At its current level of 59.3, confidence in Asia is slightly higher than the global index, which held steady at 58.0. This indicates that while economic confidence in Asia has waned over the past two years, it is now more aligned with confidence around the globe.

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