Public confidence in the nation’s economy and equity investments decreased this month from last month due to an outbreak of COVID-19 in China, a survey released yesterday by Cathay Financial Holding Co (國泰金控) showed.
About 50.4 percent of the 17,722 Cathay Financial customers polled forecast that Taiwan’s economy would deteriorate in the next six months, surging from 25.8 percent last month, the poll showed.
Only 22.4 percent expected the economy to improve, down from 35.8 percent in the previous survey, while 21.9 percent thought that the economy would remain unchanged, compared with 29.8 percent last month, the survey showed.
The online poll was conducted in the first week of this month, Cathay Financial said, adding that its business climate index for this month fell to minus-18.3, hitting its lowest in 15 months.
The investors’ downbeat sentiment was due to the outbreak, which was first reported last month, Cathay Financial said.
“Fear of COVID-19 has made people more conservative in terms of consumption and property transactions. As no one knows when the outbreak would be contained, people want to save money and delay making big-spending decisions,” Cathay Financial economic research division manager Nelson Chen (陳志祿) said in a statement.
Only 18.7 percent and 23.9 percent of respondents planned to increase consumption of durable goods and make large purchases over the next six months respectively, down from 21.9 percent and 31.3 percent in the previous poll, while 60.1 percent did not consider selling their properties and 66.4 percent had no intention to buy a home for the time being, the survey showed.
In light of delayed operations or fewer orders for their companies, 18.8 percent polled expected to receive pay raises over the next six months, down from 25.9 percent last month, Chen said.
The gloomy sentiment led investors to prefer cash or time deposits rather than equity investment, with 52.1 percent expecting the TAIEX to decline in the next six months, the survey showed.
Cathay Financial forecasts that the outbreak would continue rattling investor confidence in the next two months, Chen said.
“However, the effects should be short term, as many experts have said that the spread of the disease would stop by summer,” Chen said, adding that confidence might recover in the second half of this year.
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