Wed, May 18, 2005 - Page 10 News List

Investors feeling more pessimistic

SURVEY Overall investor confidence is down, a poll found, with expectations for the stock market and the domestic economic outlook falling sharply

By Amber Chung  /  STAFF REPORTER

The investor confidence index slumped this month, dragged down by a sluggish local bourse, slowing economic growth and the nation's decreasing trade surplus, according to a survey released by JF Asset Management Taiwan yesterday.

JF Asset Management Taiwan, part of JP Morgan Fleming Asset Management, initiated the investor confidence survey last July and has conducted the poll every two months since then.

The overall investor confidence index dropped to 105.6 points this month, down from a record high 115.1 points in March, according to the survey, which polled 1,024 investors over the age of 20 years old nationwide from April 26 to May 10.

The index gauges the public's expectations for stock performance, the domestic economic outlook, the political environment, cross-strait relations, the domestic investment environment, the global economic climate as well as personal investment portfolios for the next six months.

The sub-index of investment confidence in the TAIEX, for instance, plunged to 105.2 points this month from 118.5 in March, while the figure for the domestic economic outlook fell to 94.4 points this month from 111.1 in March.

JF Asset Management Taiwan said the adoption of new accounting rules has weakened people's confidence in stock investments, while fluctuating stock markets worldwide have together eroded investors' confidence.

"International crude oil prices shot to a record high of US$57.27 per barrel during March and April, which significantly impacted on investors' confidence," JF Asset Management Taiwan's vice president Judy Shih (石恬華) said in the report.

The nation's falling trade surplus and a downward revision by Academia Sinica for this year's economic growth rate to 4.05 percent from 4.37 percent, plus foreign investors' net sale of a combined NT$54.1 billion of stocks during these two months, all depressed investor confidence, causing the TAIEX to slide by 7 percent during the same time, Shih said.

Trending down

* Overall investor confidence fell to 105.6 points this month, from a record high of 115.1 points in March.

* The sub-index for the TAIEX slid to 105.2 points this month from 118.5 in March.

* The outlook for the domestic economy dropped to 94.4 points, from 111.1 in March.

* The index for the six-month outlook fell 94.4 points, from 111.1 points in March.

The TAIEX yesterday closed down 0.54 percent at 5,894.01.

Looking ahead, investors appear to be pessimistic about the investment outlook for the next six months, with the confidence index plunging to 94.4 points from 111.1 points two months ago, the survey said.

The survey also found that investors have decreased the proportion of stocks in their portfolios to 60.5 percent this month from 61.7 percent in March. They have turned to other investment products like insurance policies and local or overseas mutual funds, it said.

The nation's mutual funds grew by 0.60 percent to NT$2.53 trillion at the end of last month, up from NT$2.51 trillion in March, according to the statistics released by the Securities Investment Trust and Consulting Association of the ROC yesterday (證券投資信託暨顧問同業公會).

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