Confidence in local equity market improving: poll
Taipei, May 23 (CNA) With many countries introducing economic stimulus measures and easing lockdowns amid eased concerns over the global COVID-19 coronavirus, confidence in the local equity market improved in May, according to Cathay Financial Holding Co.
Citing a survey conducted May 1-7, Cathay Financial said 35.6 percent of the respondents said the local stock market will perform better over the next six months, while 36.6 percent said the weighted index on the Taiwan Stock Exchange (TWSE or Taiex) will fall over the next six months.
This translates into an optimism index for equity investments over the next six months of about minus 1 for May, a significant improvement from minus 35.0 in April, the poll found.
The survey results came after the weighted index on the TWSE bounced back by more than 13 percent in April from a slump of about 14 percent in March as the global equity market rebounded amid optimism toward an economic recovery.
The survey indicated that the appetite for investors to take risks rose to minus 2.2 in May from minus 9.6 in April, marking the first rebound since the pandemic began in December 2019.
It showed that 25.1 percent of the respondents said they would cut their cash positions to raise their equity holdings.
In addition, the optimism index for the current economic condition also rose to minus 74.4 in May, up from minus 82.1 in April, while the optimism for the economy over the next six months fell to minus 10.4 from minus 5.14, according to the survey.
The survey found that the optimism index for wage hikes over the next six months rose to minus 17 in May from minus 25.3 in April, stopping a three-month falling streak, but the optimism index for the current wage conditions fell to minus 22.6 from minus 20.0.
The index for purchases of big-ticket items such as cars and homes improved to minus 21.6 in May from minus 40.8 in April, while the index for purchases of durable goods also rose to minus 32.3 from minus 39.9, according to the survey.
Cathay Financial said the respondents pegged Taiwan‘s 2020 economic growth at 1.3 percent, down from 2.1 percent in a similar survey conducted in April, due to the impact from COVID-19, with 72.4 percent of the respondents saying they expect the growth to hit 1 percent or higher for the year.
The survey collected 16,912 valid online questionnaires from clients of Cathay Life Insurance and Cathay United Bank, which are 100 percent owned by Cathay Financial.