April 1 (Reuters) - Analysts are cutting Asian companies'
2020 earnings forecasts sharply on concerns that factory
shutdowns and social distancing measures to combat the spread of
coronavirus will hurt corporate profits badly this year.
Analysts have cut their profit estimates by 6.4% over the
past month, Refinitiv data showed.
Last week, Goldman Sachs lowered its forecast for the
region's 2020 earnings per share (EPS) growth to -14% from +1%,
bringing the aggregate cuts since the virus outbreak to 24
percentage points.
"We expect further substantial negative revisions. Among
the larger markets, we lower our China 2020 earnings growth 6pp
to -6%, Korea 42pp to -20%, Taiwan 32pp to -30% and India 12pp
to -3%," it said.
According to Refinitiv data, South Korea faced the biggest
earnings downgrades in Asia, with an average cut of 24% in the
past month.
South Korea's exports dipped 0.2% year-on-year in March,
data showed on Wednesday, as the coronavirus affected factory
production and supply chains. Indonesia, Thailand, and Australia also faced cuts of over
10% each over the past month.
Among industries, energy sector firms faced a 23% cut, the
biggest to 2020 earnings as a result of a sharp decline in oil
prices over the past month.
With more people locked inside their homes, the consumer
sector also faced bigger downgrades, the data showed.
Interest rate cuts across the region to bolster economies
against the coronavirus outbreak are also likely to affect the
banking sector's profits, some analysts said.
In the first quarter, MSCI's broadest index of Asia-Pacific
shares .MIAP00000PUS plunged about 20%, registering the
biggest quarterly decline since September 2008.
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Change in Asian companies' profit estimates https://reut.rs/3dKi5gG
Asian companies' sector-wise profit estimates change IMAGE https://reut.rs/2UPH0H6
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