Public confidence in the nation’s economic prospects this month registered its sixth consecutive monthly decline, with investment sentiment falling to a record low amid the recent bout of volatility, according to a survey by Cathay Financial Holding Co (國泰金控).
In this month’s survey, the economic optimism index dropped to minus-67.2, compared with minus-46.6 last month, while the index measuring economic optimism over the next six months slid from minus-33.3 to minus-44.6, marking a new low since the previous eurozone debt crisis flareup in June 2012, although the pace of the figure’s decline slowed, the survey showed.
The survey also gave a clear picture of the public’s bleak outlook as indices measuring sentiment on employment, wage growth and consumption continued to trend downward this month.
Although the TAIEX had since recovered from its precipitous fall to 7,023 points last month after the National Financial Stabilization Fund was activated to help weather volatility sparked by China’s slowing economic growth, the study’s investment sentiment index continued to trend lower this month to minus-40.2, from minus-38.8 last month.
The pace of decline slowed this month after the governing bodies demonstrated a willingness to resume talks on adjusting the controversial capital gains tax, the survey showed.
On expectations for the local bourse, the survey’s stock market index this month fell to minus-40.2 from minus-38.8 last month, with 57 percent of respondents anticipating the TAIEX to keep shedding in the next six months.
The public’s appetite for investment risk continued to recede this month, with the proportion of respondents planning to reduce their equity holdings increasing to 38.6 percent from 34.2 percent, while the proportion of respondents planning to increase their stakes dwindled to 13.3 percent from 14.7 percent last month.
As next year’s presidential election approaches, 44.4 percent of respondents expect the TAIEX to trade between 7,000 and 8,000 points for the remainder of this year, while 30 percent expect to see the weighted index fall below 7,000 points, and only 6.2 percent see the TAIEX soaring above 8,500 points, the survey showed.
Reflecting market mechanism, the TAIEX fell 1.83 percent, or 155.1 points to 8,307.04 points as the ban on short selling shares at less than the previous day’s closing prices was lifted yesterday.
Cathay Financial’s monthly survey, which collected 22,659 valid responses from its customers, was conducted from Sept. 1 to Sept. 10, prior to the US Federal Reserve’s announcement it would delay planned interest rate hikes on Friday.
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