More Asian financial chiefs are saying this year that their firms expect

More Asian financial chiefs are saying this year that their firms expect to increase capital expenditure, as the outlook for developing economies in Southeast Asia improves.

Despite lingering global economic headwinds, 46 per cent of 600 executives polled in a Bank of America Merrill Lynch survey said their spending would be higher than last year, with those in the Philippines, Indonesia and Thailand being the most bullish.

In a similar poll last year, just 39 per cent of the executives expressed interest in expansion, in light of euro-zone debt problems and the US budget crisis.

Following a strong run in Southeast Asia’s stock markets, the more positive sentiment was driven by buoyant domestic consumption and massive government-led infrastructure programmes, as well as favourable demographics and economic fundamentals.

Respondents also said firms in Southeast Asian countries got easier access to credit, probably because their domestic banking sectors were expanding, while those in developed countries were pulling back because of more stringent capital requirements under Basel III. Only 30 per cent of the respondents expected a rise in borrowing costs, against 47 per cent last year.

Respondents – who included executives from China Telecom, Singapore property firm CapitaLand and Japanese electronics maker Toshiba – said they were being cautious with their spending plans in Taiwan and South Korea. More than half of them said they would either scale back or maintain existing levels.

Despite Japan’s massive stimulus programme, 61 per cent of respondents said their spending in the country would be reduced or remain unchanged.