Public confidence in the economy and equity investments picked up this month, as major companies offered a rosy business outlook and the local bourse basked in liquidity-driven rallies, a survey by Cathay Financial Holding Co (國泰金控) showed yesterday.
The sentiment upturn came after exports recovered to positive territory last month and global funds propelled the TAIEX and the New Taiwan dollar to new highs in more than a year.
The survey found that 24 percent of respondents believed the nation’s economy would improve in the next six months, up from last month’s 21.7 percent.
Still, a vast majority held pessimistic or neutral views, with 31 percent saying the situation would remain unchanged and 39 percent worried that the economy might deteriorate.
The sentiment change reflects the nation’s slow economic recovery, with GDP growth likely to hover at about 1 percent this year, Cathay Financial economic research department assistant manager Achilles Chen (陳欽奇) said.
The Directorate-General of Budget, Accounting and Statistics is to update its GDP forecast for this year on Friday.
Positive guidance by major firms suggests the recovery is stable, despite its slow pace, Chen said.
Taiwan Semiconductor Manufacturing Co (台積電), the world’s largest contract chipmaker, last month raised its capital spending to meet stronger-than-expected mobile phone demand.
MediaTek Inc (聯發科), which supplies handset chips to Chinese brands, is looking at better sales going forward.
Global uncertainty over the UK’s withdrawal from the EU drove funds from advanced to emerging markets, which lent vigor to the local bourse, the report said.
The TAIEX has gained 1.4 percent so far this month, closing at 9,110.36 yesterday, with net purchases by foreign funds reaching NT$58.76 billion (US$1.88 billion), Taiwan Stock Exchange data showed.
Fifty-five percent of respondents plan to keep their equity portfolio steady this month, while 27 percent plan to trim their positions, the survey found, adding that 29 percent lowered their holdings last month.
The confidence improvement did not extend to the housing market, as 75 percent of respondents said it is unwise to buy houses now and 61.3 percent said it is not wise to sell either.
Nearly 40 percent of respondents expect housing prices to drop by 3 percent and 37.5 percent expect a more drastic correction. The finding bodes ill for the property market, which might continue to slow unless sellers make concessions to attract buyers, Cathay Financial said.
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