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Investor sentiment at one-year low

Taiwan’s investor sentiment in the third quarter declined to its lowest level from a year ago and ranked second-last among the 13 countries in the Asia-Pacific region, ING’s quarterly survey, the Investor Dashboard Sentiment Index, showed yesterday.

The survey, conducted last month, found that investor sentiment in Taiwan had turned “pessimistic” from “neutral” and scored only 65 points in the third quarter, from the optimistic 134 points in the same quarter last year, outperforming Japan’s 53 points — the lowest among the 13 countries surveyed.

The index drop was especially significant in export-oriented economies such as Hong Kong, Singapore, South Korea and Taiwan.

Investor sentiment across Asia mostly declined, except in Indonesia, Malaysia, the Philippines and Thailand. India had the highest score, at 156 points, down from 163 points in the second quarter.

“Taiwan has a strong connection with the global economy, so the investor dashboard sentiment index fully reflects investors’ uncertainty here about the local economy,” Steven Billiet, CEO of ING Securities Investment Trust (Taiwan) Ltd (ING 投信), wrote in a statement released yesterday.

“We expect Asian and Taiwanese investor dashboard sentiment indexes in the fourth quarter will be decided by the impact of the mid-September economic earthquakes that we have seen in the US and Europe and reactions from other markets around the world,” he said.

Already, Taiwanese investors have expressed concerns over the performance of potential investment destinations, including the local bourse and the property market, in the next quarter.

About 48 percent of Taiwanese respondents said they expected the local economy to deteriorate in the fourth quarter, while 22 percent investors expected an improvement.

The same 48 percent of respondents believed the TAIEX would fall in the fourth quarter, up from 29 percent in the second quarter, while expecting property prices would fall by an average 2.9 percent.

However, statistics from the Directorate-General of Budget, Accounting and Statistics showed that rising prices caused by imported inflation were peaking and that prices of fuel and electricity, which rose beginning in July, would remain steady in the next six months.

Twenty-three percent of Taiwanese investors expected their personal financial situation would improve in the fourth quarter — the lowest percentage among Asian markets after Japan.

ING said investor sentiment should turn positive in the next quarter.

During this period of high volatility in financial markets and uncertainty about the global economy, “Taiwanese investors [should] stay focused on a long-term investment plan and manage their investments carefully,” Billiet said.
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