S. Korean firms' financial status to worsen in Q3: poll

SEOUL, July 10 (Yonhap) -- A majority of South Korean firms expect their financial conditions to worsen in the third quarter of this year due to decreased sales and soaring commodity prices, a poll said Sunday.
According to the survey of 500 companies taken by the Korean Chamber of Commerce and Industry (KCCI), the corporate finance index dropped to 97 for the July-September period from 102 for the second quarter.
It dropped below the 100 mark for the first time since the first quarter of 2010, when it hit 99. A reading below 100 means that pessimists outnumber optimists.
About 62 percent of the companies polled cited an expected fall in their sales as the biggest reason for the decline, according to the findings of the survey.
"Despite the upswing in exports, the companies' financial conditions are forecast to worsen due to sluggish domestic demand and a rise in the interest rate," the KCCI said. "The decline in the index is also attributed to commodity price hikes, inflationary pressure, volatile exchange rates and the European debt crisis."
The poll showed that bigger companies expect their financial status to improve in the July-September period, while small and mid-sized firms forecast it to decrease.
The index gauging larger firms' outlook for their third-quarter financial conditions came to 105, while that of small and medium-sized companies stood at 95.
brk@yna.co.kr
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