ASIA CONTINUES TO BE DRIVER OF GLOBAL CONFIDENCE

• Global Business Confidence Up For 2007

The first findings from the International Business Report (IBR) from Grant Thornton International published today show that Medium to Large Enterprises (MLEs) around the world are considerably more optimistic about the prospects for their economies in 2007 - with an optimism/pessimism balance percentage (*see note below) of +45%, up from +39% last year. The survey, which covers the opinions of 7,200 business leaders in 32 countries, represents 81% of global GDP.

Asian business owners continue to be the most confident in the world, with India, the Philippines, Mainland China and Singapore taking the top four positions in the survey. India’s position at the top of the optimism/pessimism league table has strengthened to an unprecedented +97% up from +93% in 2006. Japan's figures reflect a steady economic recovery over the past five years from an optimism/pessimism balance of -71% in 2003 to just -5% in 2007.

In the case of Malaysia, the confidence index has gone up from 36% in 2006 to 38% this year, citing a balance percentage with global average of 45%. Whilst the confidence level in Malaysia has increased slightly, it has fallen considerably behind its ASEAN neighbours namely Singapore and Philippines but not Thailand as its balance percentage is below Malaysia at 30%.

“As expected, Malaysia’s balance percentage is much lower when compared to the two giant economies in Asia with India leading at 97% and Mainland China closely following at 85%,” Dato’ N K Jasani Managing Partner, Shamsir Jasani Grant Thornton was quoted as saying. When comparing the balance percentage, Malaysian MLEs are more optimistic on selling prices and turnover as compared to the global and East Asian averages. However, the Malaysian MLEs are less optimistic as compared to the other two averages when it comes to creation of new employment and investment in new buildings and machinery. According to Dato’ Jasani, the above requires further consideration by the Government and trade bodies since Malaysia, when referring to the countries with greatest expectations for turnover growth in 2007 league table, has faired among the best at 77%. Dato’ Jasani said this should translate into greater investment in plant and machinery as well as an increase in employment. He emphasized that this is where the benefits to the economy from much better commodity prices, strong Governmental efforts in tourism promotion as well as liberalisation of the property sector have not been fully recognised by the MLEs. “The Government and the trade bodies should highlight these positive developments and thereby encourage the feel good factor amongst our business community,” he added.

“For the first time in five years the findings of our survey don't appear to be influenced by extraordinary global events such as terrorism, natural disasters or potential health scares”.

Dato’ Jasani continued: “The findings from the International Business Report show a rebalancing of the global economy with increasing optimism in Europe and a more pessimistic outlook from US business owners. However, the European level of confidence cannot match the fast rising optimism in Asian emerging economies.”

Ends

*The figure is the percentage balance of the respondents who are optimistic less those who are pessimistic. The highest possible figure countries are able to record is +100% and the lowest is -100%