Investor confidence was down this quarter to its second-lowest level in history, as misgivings were revived over policy uncertainty and sluggish stock turnover, a JPMorgan Asset Management Taiwan Ltd (摩根資產管理) survey showed.
The confidence gauge, compiled by the local branch of the US-based company, shed 4.5 points from last quarter to 81, with the government still struggling to end disputes over the number of national holidays and other policy issues, the quarterly report found.
The gauge was below 81.8 when the global financial crisis hit in 2008.
Overall sentiment declined despite local investors gaining confidence in the global economic outlook and international crude prices, the survey found.
“Ongoing disputes over the number of public holidays have deepened unease over policy uncertainty,” JPMorgan Taiwan vice president Alex Chio (邱亮士) said in a news release.
While the TAIEX hovers around relatively high levels, trading volume remains small, reflecting a lack of investment interest, Chio said.
The quarterly survey aims to gauge how local investors view economic, political and market developments, with scores above 100 suggesting positive sentiment and scores below the threshold indicating a lack of confidence.
The sub-index on the local economy fell 5.3 points to 70.8 and the gauge on cross-strait relations dropped 14 points to 64.9, the survey said.
The confidence reading on the stock market shed 8.7 points to 76.9, according to the survey, which polled 1,069 investors between Oct. 11 and Oct. 31.
Daily stock turnover last month averaged NT$66.1 billion (US$2.07 billion), constraining the performance of shares in companies with small and medium capitalizations, the survey said.
The situation could deteriorate this month as foreign funds are pulling out of the local market on reports that US president-elect Donald Trump called on Apple Inc to manufacture smartphones, laptops and tablets in the US, which might take orders away from Taiwanese suppliers.
Trump also pledged to withdraw from the Trans-Pacific Partnership on the first day of his presidency, making cross-border trade more expensive and difficult.
Foreign institutional players yesterday cut NT$3.74 billion net worth of local shares, raising the aggregate oversold amount to NT$102.22 billion this month, Taiwan Stock Exchange data showed, signifying a continued capital outflow.
The fund flight is likely to continue as the chance of interest rate hikes next month by the US Federal Reserve heightens, stock analysts have said.
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