Seoul - XINHUA
Business sentiment among South Korean large companies remained sluggish due to expectations for further reduction in the U.S. Federal Reserve's monthly bond purchases, a business lobby survey showed Monday.
Business survey index (BSI) for February, a gauge of business environment outlook for the upcoming month, fell to 88.7 from 93.4 a month earlier, staying below the benchmark 100 for four straight months, according to the Federal of Korean Industries (FKI).
The index was based on the survey responses from the country's 600 largest firms by sales. A reading below 100 means pessimists outnumber optimists.
The dimmer outlook came after the U.S. central bank decided to reduce its monthly bond purchases by 10 billion U.S. dollars to 75 billion dollars starting from January.
Expectations spread that the Fed may reduce its asset purchasing program further to 65 billion dollars from next month, boosting concerns over corporate profitability among local companies.
Samsung Electronics, the world's largest maker of smartphones, chips and flat screens, saw its operating profit for the fourth quarter drop 18.2 percent from three months earlier.
Hyundai Motor, the country's largest carmaker, recorded a fall in operating profit last year, the first decline in three years. "Macroeconomic data showed signs of recovery, but business environment for local companies remained sluggish. Corporate investment should be activated through aggressive deregulations to stimulate the domestic economy,"said Kim Yong-ok, head of FKI's economic policy team.