Survey shows little optimism for TAIEX to breach 10,000 points by end of year
July 17, 2014, 12:01 am TWN
TAIPEI--Results of a survey released Wednesday show that only 9 percent of respondents thought the benchmark weighted index on the Taiwan Stock Exchange will breach the 10,000-point mark by the end of this year even though the local market has posted strong gains so far this year.
Cathay Financial Holding Co. (國泰金控), which conducted the survey between July 1-7, said the results indicate that many investors are alert over a major pullback after recent strong showing, adding that most investors remain rational despite the significant upswing.
Since the beginning of this year, the main board has risen more than 10 percent. On Wednesday, the weighted index closed at 9,484.73 points.
In the survey, which collected 21,753 valid questionnaires, 23.4 percent of those polled said they expect the local index to range between 9,300 points and 9,699 points by the end of this year, 22.5 percent of them thought the index will move between 8,700 points and 8,999 points, and 18.3 percent expect a range between 9,700 points and 9,999 points.
Although only a small number of investors think the index will breach 10,000 points by the end of this year, Cathay Financial said, the solid gains in the local market has strengthened many investors' appetite for risk.
According to the survey, the index for investors' risk-taking appetite rebounded to positive territory of 0.3 in July from a minus 3.2 recorded in June. The July figure was the highest since March 2012, when the index stood at 1.0.
Cathay Financial said that the strong rebound in share prices, improvements in the local economy, including exports and industrial production, as well as a rebound in the global economy, have made the local public more upbeat about the economic outlook.
In July, the confidence in the economy rose to 22.4 percent from 10.3 percent recorded in June. The July figure was the highest in 28 months, Cathay Financial said.
The survey indicated that 43.2 percent of those polled agreed that the local economy will improve over the next six months, while 20.9 percent of them said the economy will fare worse.
About 18 percent of the respondents predicted that their wages will increase over the next six months, while 13.2 percent of them thought their wages will trend lower over the next six months, the survey said.