Taiwan’s investor confidence turned negative this quarter, ending three consecutive quarters of positive sentiment, as the disappointing economic showings of Europe and Japan renewed concerns over the pace of global recovery, a recent survey by JPMorgan Asset Management Taiwan found.
The US fund house’s investment gauge posted 92.8, down 12.5 points from last quarter and sliding for the first time below the neutral threshold this year, the quarterly survey found.
The sentiment retreat came after the much-tracked MSCI weakened 10 percent between Sept. 3 and Oct. 16, erasing the previous increase this year and weighing on market confidence, the survey said.
The survey polled 1,069 local investors aged 20 and older between Oct. 6 and Oct. 17, with a value above the 100-point mark indicating positive sentiment and a score below the benchmark signaling weak confidence.
The TAIEX gained yesterday, but the gains were limited by political uncertainty ahead of the nine-in-one elections on Saturday next week, with the TAIEX closing up 12.66 points, or 0.14 percent, at 9,091.53, on turnover of NT$78.85 billion (US$2.55 billion).
Traders said it would be difficult for the local bourse to jump over the technical resistance at about 9,100 points before the elections, without turnover expanding to NT$100 billion or higher.
“The TAIEX took a downturn before global bourses, reflecting unease on the part of Taiwanese investors about the economic outlook at home and abroad, capital market performance and cross-strait relations,” JPMorgan Taiwan vice president Alex Chio (邱亮士) said in the survey.
The sub-index on Taiwan’s economic prospect tumbled 16.1 points this quarter from last quarter, while the confidence measure on local shares dropped 15 points, the JPMorgan survey said.
Meanwhile, the sub-index on expectations of investment returns weakened 13.1 points, the sentiment on investment environment fell 12.5 percent and confidence on political and cross-strait situations retreated 12.5 points, according to the survey.
The confidence movement this year is somewhat similar to that of last year, when a sizable number of investors decided to take profits on their portfolios before it was too late, Chio said.
A fuel price decline significantly eased inflationary pressures, with less than 80 percent of respondents expecting consumer price hikes, the lowest in five quarters, the survey indicated. However, 40.9 percent expect housing prices to climb higher in the coming six months, the survey said.
A majority of investors — 53 percent — said that they made money from investments overseas, the highest since July 2011, the survey said.
Investments in local shares generated more losses than gains, as only 43 percent reported profits and 48 percent of investors earned money from their overall portfolios, the survey said.
The figures lend support to diversified investments to buffer the impact of corrections in some markets and increase chances of gains in others, Chio said.
US investment tools proved the most popular and profitable this year amid renewed uncertainty regarding global recovery, he said.
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