Political uncertainty and economic instability top the list of concerns among Taiwanese investors, with a majority of them ranking cash as the best investment opportunity in the coming 12 months, a survey by Legg Mason Global Asset Management said.
A total of 31 percent of investors aged 40 and older expressed worries that economic instability would derail investment progress this year, well above the Asia average of 20 percent, making Taiwanese the most pessimistic in the region, said Legg Mason, which has US$657 billion in assets under management.
“Taiwanese investors are the most concerned in Asia about economic instability in their own country, with conservative sentiment on the rise,” Legg Mason Taiwan business development director Shannon Wang (王心如) said.
About one-third of the respondents cited the impact of the presidential elections as the primary source of concerns that would weigh on the domestic economy over the next 12 months, the survey said.
Hotel operators have reported a noticeable decline in the number of Chinese tourists in the first quarter and expect the trend to persist if Beijing dislikes the inaugural speech of president-elect Tsai Ing-wen (蔡英文).
Policymakers have suggested diversifications of customer sources to contain the risks.
As a result, 61 percent of investors are looking at a drop in the TAIEX, even though counterparts in other Asian markets anticipate an upturn, the survey said.
A large majority of investors, 78 percent, said the world economy is on the brink of another financial crisis in light of an extended period of feeble growth, despite aggressive monetary easing by major economies, the survey said.
Sustained crude and commodity price slumps contribute to the apprehension, the survey said.
Against the backdrop, 51 percent of local investors consider cash the best investment opportunity, much higher than the global and Asia average of 33 percent, the annual survey indicated.
Still, Taiwanese investors remain keen on cross-border investment opportunities, with 80 percent holding investments outside of the local market, the survey said.
China tops other foreign countries in terms of investment opportunity with a score of 63 percent, followed by the US at 55 percent, India at 42 percent and Japan at 32 percent, the survey said.
However, a recent survey by JPMorgan Asset Management showed most Taiwanese investors incurred losses in the past six months, regardless of their investment targets.
Only 26.3 percent of Taiwanese investors reported gains during the period, while 51.2 percent saw their portfolio shrink, the JPMorgan survey said.
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