Public confidence in the local bourse plunged this month as the TAIEX lost 7.67 percent so far this year, with global funds pulling out of Asian markets — including Taiwan — on concern over disappointing economic data, a Cathay Financial Holding Co (國泰金控) survey showed yesterday.
About 50 percent of the respondents expect the main trading index to weaken further in the coming six months, while only 17.7 percent held a positive view, the survey found.
Nineteen percent had a neutral stance, while 14 percent said they did not know, it showed.
The results fell in line with the TAIEX’s poor showing so far this year, even though it fared better than regional peers due to intervention via the National Stabilization Fund (國安基金).
The dull economic outlook and lingering policy uncertainty are believed to be weighing on local financial markets, while the US Federal Reserve’s recent interest rate hike helped foster turmoil across bourses worldwide, Cathay Financial Holding said.
Among respondents, 48.6 percent said the TAIEX is likely to peak between 8,000 and 8,500 points this year, while 51.4 percent said the trough would be from 7,000 to 8,000, the survey showed.
Another 34 percent said the weighted index could fall below the 7,000-point mark, it showed.
The forecasts suggest limited room for upward movement given the TAIEX’s 7,699.12 close yesterday.
As a result, risk appetite declined, with 32.2 percent saying they had plans to cut positions, although 53.5 percent said they intended to stay put and 14.3 percent aim to increase stakes.
Willingness for private consumption also took a hit, with 39.6 percent planning to cut purchases of durable goods, while 29.4 percent said they would lower spending on big-ticket items.
As for the property market, 76.4 percent said it is not wise to buy homes now, while 60.2 percent said it is ill-advised to sell, the survey showed.
The findings indicated an extended soft patch for housing transactions, though property analysts forecast a rebound following the elections.
A total of 45.7 percent said the economy would deteriorate going forward, while 19 percent said it would improve, the survey showed.
The survey was conducted among 16,537 Cathay Financial customers online from Jan. 1 to Jan. 7.
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