Confidence over the economic outlook and stock investment in Taiwan improved after economic gauges moved upward and tensions eased in the US-China trade dispute, a Cathay Financial Holding Co (國泰金控) survey showed yesterday.
Out of 17,243 respondents, 54.43 percent said that they expected the economy to improve or remain the same in the next six months, while 39 percent expected a deterioration, Cathay Financial said, citing a poll of its customers conducted online in the first week of this month.
Cathay Financial attributed the stable sentiment to a domestic economy that is expected to expand by 2 percent this year — despite a global slowdown — after a tentative agreement between Washington and Beijing to set aside tariff hikes on consumer electronics.
The survey showed that 78.4 percent of respondents said that Taiwan’s GDP growth this year might be above 2 percent, outpacing major trade rivals Hong Kong, Singapore and South Korea.
The US-China trade dispute has been a serious blow to countries that rely heavily on exports, but Taiwan has been resilient on the back of strong private investment and trade rerouting, Cathay Financial said.
Local semiconductor firms, in particular, are acquiring new capital equipment to meet demand for the development of 5G devices and services, it said.
The manufacturing purchasing managers’ index, exports and industrial production all returned to growth last month, even though non-tech sectors remained in the woods, government data showed.
Firms in the supply chains of global technology brands would benefit from the ongoing high season for smartphones, PCs, wearables and other gadgets, Cathay Financial said.
Expectations of stable consumer prices and household incomes helped boost confidence, it said.
The TAIEX has rallied past 11,000 points, buoyed by the trade truce and foreign fund flows, it said.
The central bank said that it has observed a global capital influx since last month, likely to take advantage of high dividend payouts by local shares.
Nearly 50 percent of respondents said that the local bourse might consolidate or climb higher in the next six months, while 34.2 percent said that they expected downward corrections, the survey showed.
Against that backdrop, 55.2 percent planned to keep their stock position unchanged, 21.5 percent intended to increase their stakes and 23.3 percent said they would trim their holdings, the survey said, adding that risk appetites picked up slightly from a month earlier.
People willing to buy big-ticket items in the next six months rose to 29.2 percent, while those who plan to spend less fell to 24.4 percent, the survey showed.
The government’s winter travel subsidy seems to be helping, Cathay Financial said, citing 43 percent who said they would plan domestic trips in the next three months.
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