Following the TAIEX’s dramatic rise over the past year, investors have turned cautious about the market’s direction going forward, a survey released by Cathay Financial Holding Co (國泰金控) yesterday showed.
Only 10.2 percent of those polled expected the weighted index to hit a peak of 15,500 to 16,000 points and 7.1 percent expected it to end above 16,000 points, the survey showed.
A larger number, 40 percent, expected the TAIEX to peak above 15,000 points by the end of the first half, while 37.1 percent expected it to peak between 14,500 and 15,000 points, it showed.
The index fell 0.45 percent yesterday to close at 15,806.18.
The report surveyed 20,912 of Cathay Financial’s clients between Jan. 1 and Jan. 7, when the TAIEX climbed from 14,732 points to 15,214 points.
As a majority of Cathay’s clients are retail investors, their predictions likely reflect public confidence in the market rather than a research-based forecast about the market, a Cathay Financial official surnamed Wu (吳) told the Taipei Times by telephone.
“Given that when we conducted a similar poll in January last year, with the TAIEX at about 12,000 points at the time, only 27 percent of respondents forecast that the TAIEX would continue climbing and peak above 12,500 points, it seems that Taiwanese are more upbeat about the stock market this year,” Wu said.
Their optimism corresponds with a rise in their risk preference, with 33.3 percent of respondents willing to withdraw their fixed deposits and invest them in the stock market, up from 30.6 percent a month earlier and 25.6 percent a year earlier, Wu said.
Overall, 46.3 percent of respondents expected the TAIEX to continue rising in the next six months, followed by 16.7 percent who believed it would be flat and 23.4 percent predicting that it would decline, the survey showed.
Meanwhile, public confidence in the economy picked up, with 43.8 percent forecasting that the economy would improve in the next six months, up from 42.5 percent a month earlier, which could be attributed to the rising availability of COVID-19 vaccines, Cathay said.
However, respondents’ willingness to buy durable goods, such as vehicles or home appliances, and to make big-ticket purchases, such as travel or shopping, diverged, with the former growing from 20.7 percent a month earlier to 22.6 percent, while the latter declined from 29.5 percent to 28.5 percent, the survey showed.
Wu said it was quite curious, “as people were usually more willing to make big-ticket purchases rather than spending on durable goods during past economic recoveries.”
This might be due to rising demand for electronic goods because of the work-from-home trend or falling demand for travel because of strict border controls, Wu said.
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