Sentiment deflated by slowing global economy: survey
Investors’ sentiment toward the local economy has been affected by a slower pace of growth in the global economic recovery pushing down the April economic optimism index, according to Cathay Financial Holding Co. ( ).
Cathay Financial cited a survey, which generated the economic op- timism index for April, saying that a fall in Taiwan’s exports dealt another blow to sentiment toward the local economy.
The survey showed that 37 percent of respondents agreed that the local economy will improve over the next six months, while 19.3 percent thought that the local economy will worsen over the next six months. The data translated into an April economic optimism index of 17.7, down from 25.6 recorded in March.
The International Monetary Fund has cut its growth forecast for the U.S. economy, the largest in the world, to 3.1 percent from 3.6 percent. China’s economy, the world’s second largest, grew only 7 percent in the first quarter of this year, the slowest pace in six years.
In the January-March period, Taiwan’s exports fell 4.2 percent from a year earlier to US$70.25 billion (NT$2.18 trillion).
Cathay Financial said that despite a fall in the April economic optimism index, the figure remained in positive territory, indicating that more investors held a positive at- titude toward the economy than those who appeared downbeat.
The financial holding company said that due to a plunge in international crude oil prices and the launch of Apple Inc.’s latest iPhone models, listed companies on the local market posted a 17 percent year-on-year increase in profit in 2014, which has provided a boost local share prices.
The survey showed that 29.4 percent of the respondents expected local shares will move higher over the next six months, compared with 27.5 percent, who anticipated that the weighted index on the bourse will fall over the next six months.
According to the survey, 20.9 percent of the respondents expected wages to increase over the next six months, while 11.4 percent thought that salaries will be cut over the next six months.
The survey was conducted via from April 1-7 by email to customers of Cathay Life Insurance Co. ( ) and Cathay United Bank (
). The financial holding company collected 31,034 valid questionnaires.