Consumer confidence improves, but faith in stocks dips to new low: poll

10/03/2020 12:59 PM
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Taipei, Oct. 3 (CNA) Taiwanese people's overall consumer confidence improved for the fourth consecutive month in September, but investors' faith in the equity market dipped to a new low, according to National Central University (NCU).

Citing a survey, the university said the consumer confidence index (CCI) for September rose slightly by 0.27 points from a month earlier to 71.6, while the sub-index measuring sentiments on investments in the local equity market over the next six months fell to a new low of 35.3, down 4.7.

The CCI reflects public confidence over the next six months in the areas of employment, family finances, consumer prices, the local economic climate, the stock market, and the likelihood of purchasing durable goods.

Dachrahn Wu (吳大任), director of NCU's Research Center for Taiwan Economic Development, said the weakness in confidence in equity investments showed investors' caution over a major pullback followed by a significant rebound in share prices in recent sessions.

The benchmark weighted index on the Taiwan Stock Exchange (TWSE), or the Taiex, recently rose by more than 40 percent from a recent low of 8,681.34 points seen on March 19, caused by escalating fears over the COVID-19 pandemic.

The Taiex ended at 12,515.61 on Wednesday. The local equity market closed Thursday through Sunday for a long Mid-Autumn Festival weekend.

The fall in the sub-index on the equity market investment was the steepest among the four factors in the September CCI, according to the poll.

Wu said many investors may think now is not a good buying point on high valuations.

The other three sub-indexes which pointed to a drop were employment, the local economic climate, and family finances, down 2.65, 1.85 and 0.3, respectively, from a month earlier at 68.65, 83 and 83.8 in September, the poll found.

The sub-index on the likelihood of purchasing durable goods, such as cars and homes, however, jumped 10.95 from a moth earlier to a new high of 119.85 in September, the survey showed.

Commenting on the surge in the particular sub-index, Chou Ho-ming (周鶴鳴), chief vice president of Taiwan Reality, said that amid concerns over COVID-19 and tensions between the United States and China, many Taiwanese investors who have operations overseas have moved some of their investments back to Taiwan, which has raised demand for domestic property.

Wu said the unstable political situation in Hong Kong and the fact that Taiwan has been doing better than many economies in fighting COVID-19, have also prompted many Taiwanese investors to repatriate their funds back home, which has further boosted demand for property.

In addition, the sub-index on consumer prices also moved higher by 0.15 from a month earlier to 39 in September, the survey showed.

A sub-index score of 0-100 indicates pessimism, while a score of 100-200 shows optimism, according to NCU. As a result, only the factor of the likelihood of purchasing durable goods pointed to optimism.

The NCU survey collected 2,856 valid questionnaires from local consumers aged 20 and over from Sept. 18-22. It had a confidence level of 95 percent and a margin of error of plus or minus 2.0 percentage points.

(By Pan Tzu-yu and Frances Huang)

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