Business confidence rebounds: LMD

Wednesday, 5 February 2014 00:01 - - {{hitsCtrl.values.hits}}

“The LMD-Nielsen Business Confidence Index (BCI) regained its losses in December, seemingly buoyed by a positive outlook regarding business in the first quarter of 2014,” leading business magazine LMD says, in its February edition. It adds: “Moving up by nine basis points to 139 in January, the index could be inching closer to its 12-month high of 147 – although we have witnessed mirror images of ups followed by downs since May last year.” The journal observes that “a stable exchange rate and a gradual reduction in the cost of borrowing may have been contributory factors in setting the sentiment for the latest BCI.”

On the other hand, the magazine quotes Nielsen’s Managing Director Shaheen Cader, who states: “The main concern appears to be inflation, with all respondents mentioning this as a pressing issue for business.” In an exclusive pre-publication news release to the Daily FT, LMD notes that “businesspeople appear to be largely positive about the outlook for the economy, with 36% of poll participants stating that conditions are likely to improve in the next 12 months. A further 35% of those surveyed say the economy will maintain its status quo.” A spokesperson for LMD’s publisher Media Services says: “The index holds true to its promise of gaining ground in the first month of the calendar year – meaning that this is a trend that has evolved over the last three years.” As for the investment climate, LMD’s BCI commentary reports that “nearly four-in-10 survey respondents (versus 30% in the prior month) have a positive view. Another 35% of those consulted during the poll say funding conditions are ‘fair,’ while over a quarter admit to harbouring a more pessimistic view.” “Projecting the BCI’s near-term trend is a difficult task, although an educated guess is that business sentiment will remain in positive territory,” the spokesperson asserts, noting also that election-related disruptions in the not-too-distant future may undermine optimism in the short term. Media Services says that the February issue of LMD will be released to bookstores and supermarkets across the island and online at www.LMD.lk on Friday 7 February.