Investor pessimism continued to build last month, with a recent survey showing a sentiment index plummeting to a record low, mainly dragged down by political turmoil, bird flu and unstable cross-strait relations.
The index fell to minus 109.4, which is a huge drop from minus 38.9 in August, according to the bimonthly survey released by the Chinese-language weekly Business Today
"This was by far the lowest point we garnered since December 2003, when we started conducting the survey," said Kuo Min-hua
The survey polled 1,092 investors by telephone during Oct. 14 to 27 about their prospects for the next three to six months.
According to Kuo, heated rivalry among political parties for the year-end elections, coupled with the passing of the organic bill of the National Communications Commission and the scandal surrounding the Kaohsiung MRT construction project, have affected Taiwanese investors' confidence in the stock market.
This is backed up by one of the supporting indices, which surveyed investor confidence in the stock market for the next three months, as it also experienced a huge dive to minus 60.5 points from the previous minus 4.8 points, she added.
The scare surrounding a possible outbreak of avian flu and stagnant cross-strait relations contributed to shaky investor confidence, she said.
However, Kuo expects a turnaround for the investor sentiment index in the next two months, as last month's results probably represent rock-bottom.
"If there is no outbreak of bird flu to impact the economy and the government is able to handle the political crises well, the index is set to rebound," Kuo added.
On the local bourse, the benchmark TAIEX rose 71.96 points to close at 5,870.37, supported by strong purchases by foreign institutional investors. Overseas fund managers bought a net NT$10.98 billion (US$327.26 million) worth of Taiwan stocks, according to the Taiwan Stock Exchange's statistics.
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