Investment sentiment to pick up in second half

Korean companies are bearish on increasing investments this year mainly because they see few viable growth opportunities, a poll conducted by the country’s largest economic organization showed yesterday.

The Korea Chamber of Commerce and Industry (KCCI) survey carried out on 1,026 local companies showed the investment sentiment index standing at 35.8 in the first half and reaching 49.2 in the July-December period.

The two readings are below the break-even 50 mark for the index. A reading above 50 and below 100 means more companies are upbeat about investments, while numbers that fall short of 50 indicate that pessimists outnumber optimists.

The 2012 index was the second such poll conducted by the KCCI, with the first one having been carried out in 2010. In that poll, the sentiment index stood at 45 and 48 for the first and second halves, respectively.

“Companies on the whole complained they did not have any place to invest their money, which directly hurt the index,” said the chamber of commerce representing 135,000 members.

It added that companies were hesitant to invest because of unstable exchange rates and high international commodities prices, particularly in the first half.

The latest poll showed the index number being lower for small and medium enterprises (SMEs) compared to conglomerates.

The figure for SMEs reached 32 compared to 45 for conglomerates for the first six months of this year.

For the second half, the KCCI said companies expect to invest more as the economy strengthens.Yonhap