After the tough past months, business conditions across a variety of sectors - including financial services - are seen as improving in the third quarter of this year, according to a new measure produced by the bank and a Hong Kong promotional body.

A survey by Standard Chartered and a Hong Kong-based promotional body shows that a forward-looking survey from at least 1,000 enterprises shows that respondents predict a business rebound in the third quarter of this year as COVID-19 pressures ease.

The UK-listed bank and Hong Kong Trade Development Council yesterday released the inaugural Standard Chartered GBA Business Confidence Index, a quarterly barometer of business sentiment in the Guangdong-Hong Kong-Macao Greater Bay Area. 

The GBAI's current performance index for business activity stood at 37.0 for Q2-2020, below the neutral line of 50. This reflects the impact of a COVID-related global recession on the export-oriented region. However, the “expectations index” is higher at 47.0.

Although the GBAI current performance index for credit was at 45.3, the sub-components indicate lower borrowing costs from both banks and non-bank financial institutions as well as improvement in banks' attitude towards lending.

The GBAI also includes industry and city sub-indices - by industry: “innovation and technology” is expected to improve the fastest, followed by “financial services”; by city, Guangzhou and Shenzhen are seen to lead the way in the post-COVID rebound, while Hong Kong is seen to lag. Among companies that plan to expand to other GBA cities, Shenzhen, Zhuhai and Hong Kong are the top preferred destinations.

“This pick-up is driven by domestic more than external demand, matching the general perception that China is the first country to begin recovering from COVID-19," Kelvin Lau, senior economist, Greater China, Standard Chartered said.