Thu, Jan 04, 2007 - Page 11 News List

Investor sentiment bounces back

By Jackie Lin  /  STAFF REPORTER

Boosted by bullish stock markets worldwide, investor sentiment in Taiwan last month rebounded in a show of optimism, the first pickup in nine months, according to a survey released yesterday.

The sentiment index climbed to 0.28 points from minus 12.3 two months ago, said a bimonthly report by the Chinese-language weekly Business Today and Shih Hsin University.

Since April last year, investor confidence has been flagging, with the sentiment index dropping to the lowest point of the year at minus 92.8 in August.

Now, as the impact of political events diminishes with the completion of the Taipei and Kaohsiung mayoral elections early last month, the stock market has showed an upward trend and investor sentiment has bounced back, the survey said.

Shares on the local bourse fell slightly yesterday, giving up early gains when players scrambled to take profits as the benchmark index approached the 8,000 mark.

The benchmark TAIEX dropped 3.5 points, or 0.04 percent, to 7,917.30, according to the Taiwan Stock Exchange Corp's statistics. During the session, the index once came close to reaching the 8,000-point level in early reading, but stopped short at 7,999.42.

The TAIEX chalked up a fresh six-year high of 7,920.80 on Tuesday.

On the Taipei foreign exchange market, the local currency also traded lower against its US counterpart, following a flat performance in the stock market.

The NT dollar closed NT$0.004 lower at NT$32.407 against the greenback yesterday.

Dealers said the stock market should continue its uptrend despite a possible correction in the near term.

But in the longer term, or over the next two months, today's survey showed that movement of foreign capital, interaction between the ruling and opposition parties and relations with China will be the three major factors affecting the local bourse.

Political scandals such as President Chen Shui-bian's (陳水扁) controversial use of a "state affairs fund" and economic developments such as inflationary pressure and foreign businesses taking over local companies will have less impact on investor sentiment, the survey said.

Institutional investors yesterday remained active throughout the session and purchased a net total of NT$12.61 billion (US$389.2 million) in Taiwanese stocks.

This included NT$9.74 billion in purchases by foreign fund managers, according to the Taiwan Stock Exchange's statistics.

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