HSBC: Vietnam leads global trade confidence

Emerging Asia is leading global trade confidence, with domestic-oriented economies like India, Vietnam, Indonesia and China among the most optimistic.

This is according to a global survey of small and mid-sized companies by banking giant HSBC.

The lender says intra-regional trade is driving the current activity, and expects the trend to continue.

Asia's booming recovery and domestic demand in the first quarter have made businesses more optimistic about their intra-regional trade prospects.

On a global basis, HSBC's trade confidence index rose from 110 to 116 points in the last six months.

A reading above 100 indicates a positive outlook

Among the most confident in Asia were India (133), Vietnam (132), Indonesia (128), and China (120).

Overall, emerging markets scored 122 points, versus developed countries at 106.

Khuresh Faizullabhoy, head of trade and supply chain, HSBC, says: " We share the confidence we've seen from the respondents in the survey, we've seen volumes pick up across the board. A lot of our traders are doing more business both with the region as well as some of the developed countries. So volumes are up, confidence is up and we're seeing sufficient support in the market in terms of trade finance activity for growth of trade to continue.

The survey also noted that Singapore companies are most optimistic about their trade prospects with Southeast Asia and Greater China in the next six months.

Mr Faizullabhoy adds: "If you look at Singapore's export numbers, you're seeing a growth in exports to the US as well as to Europe. It's a much broader recovery. People recognise that and although they are counting on Asia being the engine of growth, the fact that the US and Europe are coming back to the market is only helping to broaden the recovery."

The survey also found that the majority of respondents see their need for trade finance increasing in the next six months.

HSBC also noted that concerns among traders had shifted from buyers defaulting on payments and lack of product demand to fluctuating exchange rates, margins and costs as top barriers to growth.