Consumer confidence picked up this month — with all indicators moving upward — as people displayed more optimism over stock investments and less concern about inflationary pressure, a National Central University survey showed yesterday.
The Consumer Confidence Index registered 86.36 this month, up from 83.41 last month and its highest since August, led by improved sentiment on stock trading on the back of favorable tax revisions, the survey said.
“Investors welcome the decision to postpone capital gains taxes by three years on active traders,” Research Center for Taiwan Economic Development director Dachrahn Wu (吳大任) said by telephone.
Even though the tax would affect relatively few traders, it would have a spillover effect on the local bourse as a whole, Wu said, adding that the stock transaction levies already include capital gains taxes.
The subindex on stock investments posted the biggest gain — 6.1 points this month to 87.9, the survey found — while the local bourse recorded a significant increase in trading volume.
The TAIEX climbed 1.08 percent so far this month to close at 9286.28 yesterday on turnover of NT$81.53 billion (US$2.57 billion), Taiwan Stock Exchange data showed.
Trading volume averaged NT$73 billion a day last month and NT$79 billion a day in October.
Investors also had a positive reading of assurances by the US Federal Reserve that it would extend its current neutral monetary policy for a considerable period of time, meaning that there is no need to worry about liquidity tightening in the near term, Wu said.
The subindex on economic outlook rose to 82.9 this month from 78.5 last month, suggesting that the public has grown more confident about the economy in the coming six months, Wu said.
The sentiment change came in line with the GDP’s showing, which might log a 3.5 percent increase this year and fare better next year, despite uncertainty at home and abroad, the economist said.
The general public tends to feel the benefits of economic growth around this time of the year, when companies discuss year-end bonuses and pay increases for the following year, Wu said.
That helps explain why the subindex on household incomes improved to 79.85 this month, up 2.45 points from last month, he said.
Public confidence in the economic outlook for the coming six months rose from 77.85 last month to 78.5 this month, the survey said.
Furthermore, the subindex on employment prospects edged up to 112.2 this month, while the gauge on durable goods consumption rose to 105.25, the survey said.
“The findings lend support to home purchases, and buyers will take action when they believe the time is right,” Wu said.
For the first time in four years, the subindex on inflationary pressures rose above the 50-point mark, suggesting the public is less worried about consumer price hikes going forward, the survey said.
Wu attributed the improvement to crude oil price declines.
The survey questioned 2,432 Taiwanese aged 20 and older between Dec. 19 and Monday last week, with a confidence level of 95 percent.
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