Consumer confidence improves as faith in stock market recovers: Survey

Taipei, July 29 (CNA) Consumer confidence improved in Taiwan in July for the first time in five months as faith in the stock market recovered after Nvidia said in mid-July it would resume sales of its H20 chips to China, according to National Central University (NCU).

Citing a survey conducted from July 21 to July 28, the NCU said the Consumer Confidence Index (CCI) rose 0.68 points in July from a month earlier to 64.38.

The CCI measures consumer sentiment over the next six months in six areas: prices, the local economic climate, the stock market, durable goods purchases, employment prospects and family finances.

Among the six factors, the sub-index for the stock market scored the largest increase of 5.15 from a month earlier to 29.11 in July to push up the overall CCI, NCU said.

Dachrahn Wu (吳大任), director of the NCU Research Center for Taiwan Economic Development, said the spike in the sub-index largely reflected the positive lead from Nvidia.

The company announced on July 14 that it had secured approval from the U.S. government to resume sales of the H20 chip, the downgraded version of its Hopper lineup, to China.

Wu said the lifting of the ban prompted investors in Taiwan to pick up large cap semiconductor stocks, in particular contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), pushing the Taiex above 23,000 points.

Despite the increase in the sub-index in July, the figure still remained below the 30-point mark, indicating that confidence was still not strong.

Market sentiment was held back by uncertainties created by the America's tariff policies as negotiations between Washington and Taipei were still underway, said Wu, who expected the final import duty on Taiwan-made goods to end up between 20 and 25 percent.

If the levy goes beyond market expectations to top 25 percent, and the Taiwan dollar strengthens, Taiwan exporters could lose their competitive edge in the global market, Wu warned.

Another sub-index that moved higher was the consumer prices factor, rising 0.27 from a month earlier to 32.74 in July, the survey found.

On the other hand, the sub-indexes for the local economic climate, family finances, purchases of durable goods such as cars, and employment moved lower by 0.46, 0.41, 0.31 and 0.18, respectively, from a month earlier to 80.65, 76.65, 96.57 and 70.53 in July, according to the survey.

According to NCU, a CCI subindex score between 0 and 100 indicates pessimism, while scores between 100 and 200 reflect optimism. In July, no factors reached optimistic levels, the university said.

The university's July CCI survey collected 3,088 responses from Taiwanese consumers aged 20 and older. It has a 95 percent confidence level with a margin of error of plus or minus 2.0 percentage points.

Also in July, a separate NCU survey conducted with Taiwan Realty showed the home-buying index fell 0.14 points month-on-month to 94.48 -- its lowest level in five years.