Investor sentiment shows slight improvement: poll

A bimonthly survey of investor sentiment showed a slight improvement from December, but economists warned that the lingering impact from the US subprime crisis and an anticipated US economic slowdown could continue to weigh on sentiment.

"The bimonthly investor sentiment index climbed 57.31 points to minus 47.4 this month, but the result still indicated pessimism," said Kuo Nai-fong (郭迺鋒), associate professor and chair at Shih Hsin University's finance department, which conducted the survey.

The index dropped to minus 104.72 in December -- the lowest since October 2005, when it hit minus 109.4 -- because of political uncertainty, global market weakness and foreign capital outflow.

Nearly 64 percent of respondents said that global factors -- rather than domestic politics and cross-strait relations -- would drive the local stock market's performance in the next two months.

"Most respondents said the US subprime crisis [27.5 percent] and its weak economic fundamentals [17.6 percent] would be the main drivers," said Andy Liang (梁永煌), president of Business Today magazine.

Chi Schive (薛琦), a guest lecturer at Shih Hsin University's economics department, said yesterday that the US economic slowdown would prompt an outflow of capital to countries where stocks are undervalued, such as Taiwan.

Shih Hsin's investor sentiment index is derived from two indexes -- personal and economic.

The economic index showed that investors were less optimistic about the stock market's performance in the next three months, whereas the personal index indicated that investors were still upbeat about attaining their investment goal and maintaining their current income level within a year.

"In general, the survey showed that investors were less upbeat on the stock market in the short term, but the index will edge up in the long run," Ji Chou (周濟), a professor at the university's department of economics, said yesterday.

The survey was conducted between Feb. 12 and Feb. 21 via telephone, with 1,098 valid responses.