* ThomsonReuters/INSEAD sentiment index at 71 vs 65 in Q1
* Global economy remains biggest concern
* Sentiment in China continues at record low
* "Extreme fears" are beginning to fade-economist
By Miyoung Kim
SEOUL, June 19 (Reuters) - Asia's top companies have become
more optimistic about their business outlook with the retail and
shipping industries rebounding sharply in the second quarter of
2013, the latest Thomson Reuters/INSEAD Asia Business Sentiment
The Thomson Reuters/INSEAD Asia Business Sentiment Index
climbed six points to 71 in June, its highest level in
five quarters and the third consecutive quarterly rise. A
reading above 50 indicates a generally positive outlook.
Global economic uncertainty remains the biggest business
risk across most countries and sectors, but 44 percent of the 91
companies that participated in the poll are now positive about
their outlook, up from 30 percent in the prior quarter.
Corporate sentiment in China, the world's second-largest
economy, remained unchanged at its record low of 50 as companies
worried about rising costs and global economic uncertainty.
"If you go back a year ago, there is a lot of concern about
the global economy - a hard landing in China, a collapse in
Europe, and double dip in the U.S. Some of those fears are
still around, but they have certainly faded over the course of
last year," said Shane Oliver, chief economist at AMP Capital
Investors in Sydney.
"So whilst companies in Asia still worry about China, it's
about whether the growth is 7.5 percent or 7.8. Some of the more
extreme fears that were seen a year ago continue to fade,
showing a gradual pick-up in company optimism."
INDONESIA, JAPAN, AUSTRALIA, S.KOREA GAIN
Corporate sentiment in Japan showed solid improvement with
the index rising to the highest level in three years as
aggressive monetary stimulus starts to revive its economy.
Of the 19 Japanese respondents, which included Daiichi
Sankyo Co Ltd, Toshiba Corp, Hitachi Ltd
and Sharp Corp, five were positive on their
outlook and 14 were neutral. In the previous survey, only one
out of 22 participants was positive.
Australia and Indonesia saw big improvements in their
outlook and were among the most optimistic economies in Asia.
Australia continued to improve in the second quarter,
driving the country's sentiment index to its highest level since
the first quarter 2012, although more participants were worried
about the global economy.
"From a general point of view, it has a lot to do with the
currency, interest rates going down, and the offshore news has
been better," said Stephen Walters, chief economist at JP Morgan
"Of the three the currency is probably the main one. When
the currency was over parity, it was quite painful for a lot of
firms. So it follows when the currency is below parity they will
feel a little bit less under pressure."
On the downside, business sentiment in India fell to its
weakest level in more than three years, weighed down by worries
about rising costs, while Thailand's sentiment index dropped to
an all-time low of 42 from 60.
SHIPPING, PROPERTY, TECH UPBEAT
Broken down by sector, most industries showed steady growth,
with property turning in its highest reading in more than two
years. Sentiment in food, drugs and the resources industries
Sentiment among shipping firms turned sharply upbeat,
helping the sector register the best showing since the first
quarter of 2012.
"Perhaps optimism is creeping back simply because we're
tired of being pessimistic," said Tim Huxley, chief executive of
Wah Kwong Maritime Transport Holdings Ltd in Hong Kong.
"Seriously, we are seeing a degree of optimism as there is a
belief that the industry is working through its self-inflicted
over-supply issues and that there might be some balance in 2014.
It could prove to be a false dawn if there is too much ordering
of new ships though."
Huxley said there was hope for an improvement in
bulk-carrier rates in the fourth quarter with iron ore
restocking and lower iron ore prices in China. He also said
crude oil tankers have been able to maintain rate gains with
owners resisting charter demands for lower prices.
Retail sentiment climbed the most after shipping to 69 from
50, while the technology industry's recovery gained momentum,
climbing to its highest level in more than a year.
Confidence among food and beverage companies fell to 75 from
the previous survey's record high of 88, as currency volatility
and rising costs posed risks.