Investor sentiment in Taiwan has weakened, with the Manulife Investors Sentiment Index falling in the fourth quarter from a quarter earlier, Manulife Asset Management Co (宏利投信) said yesterday, citing a quarterly survey.
Investor sentiment index fell two points to minus-11, far below the average of 22 points in Asia, Manulife said.
Taiwan’s sentiment index was higher only than Hong Kong’s at minus-13 points.
The survey also covers investors in China, Japan, Singapore, Malaysia, Indonesia and the Philippines, Manulife said, showing that fears of potential losses due to poor investment strategies inspired many Taiwanese investors to keep ample cash on hand.
The survey indicated that investors in Taiwan tended to hoard the cash equivalent of 24 months salary, and although the amount fell from the third quarter’s survey, it still stood above the average of the cash equivalent of 21 months salary kept by investors across Asia.
Cash made up 28 percent of Taiwanese investors’ total assets, Manulife said.
Apart from investment instruments providing fixed income, local investors appeared reluctant to park their money in equities, real estate and mutual funds.
Fixed income investments made up only 4 percent of Taiwanese investors’ total assets, the survey found. Taiwan’s investor sentiment toward the equity market stood at minus-17, the lowest level among Asian countries polled.
Manulife said that concerns over market volatility and low corporate profitability, dissuaded investors, with many thinking it was not a good time to enter the stock market.
Despite the weak faith in the stock market, equity holdings accounted for 15 percent of local investors’ total assets, higher than the Asian average of 11 percent.
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