Sat, Jan 18, 2014 - Page 13 News List

Confidence picks up for first time since June 2013

By Crystal Hsu  /  Staff reporter

Public confidence about the economy and wages outlook picked up this month, the first time since June last year, a Cathay Financial Holding Co (國泰金控) survey showed yesterday.

The boost in sentiment came after the local bourse rallied to a 29-month high at the end of last year while corporate earnings achieved a modest pickup.

A total of 32.6 percent of the survey’s respondents expect the economy to improve in the coming six months, outnumbering the pessimists at 30.2 percent.

Another 30 percent said economic conditions are likely to stay the same, while the remaining 7 percent voiced no opinion.

The recovering confidence bodes well for private consumption and the overall economy, even though exports and other bellwethers remain soft, said Achilles Chen (陳欽奇), assistant manager at Cathay Financial’s economic research department.

The TAIEX finished at 8,647 points on Dec. 31 last year, the highest since September 2011, taking cues from Wall Street and encouraging the return of major and individual players, Chen said.

Consequently, 34.1 percent of the respondents expect the main trading index to climb higher in the coming six months, compared with 25.8 percent who are looking at downward corrections, the survey said, adding that 22.4 percent took a neutral stand.

It remains to be seen if the improving sentiment will translate into higher risk appetite as a majority, 53.9 percent, plans to keep investment unchanged and 25.9 percent intend to lower their equity holdings. Only 20.2 percent said they would lower cash and increase risky assets.

Meanwhile, people are less pessimistic about their wage outlook, although 63.9 percent said their income is likely to stagnate in the next six months.

Pay raises by state-run enterprises may spread to companies in the private sectors as faster economic recovery in developed markets pans out, Chen said.

About 17 percent of the respondents are looking for a wage increase in the following six months, a 22-month high, the survey showed, after different companies such as Wowprime Corp (王品集團) announced plans to raise pay for employees this year.

However, the survey found that the mood does not extend to the property market. A total of 79.2 percent said they believe it is unwise to buy houses now, with 48.3 percent believing it is time to sell.

This sentiment may slow housing transactions going forward unless sellers are willing to soften prices, Chen said.

The survey polled 33,478 Cathay Financial customers via e-mail from Jan. 1 to Jan. 7.

This story has been viewed 945 times.
TOP top